REFERENCE

By David F. Carr  |  Posted 2003-08-13 Email Print this article Print
 
 
 
 
 
 
 

"Corporate Performance Management"—how new can that be? Isn't that the basic charter of C-level executives? Yes, but now technology can help streamline the process.

: Performance Improvement Cycle">
REFERENCE: Performance Improvement Cycle
Corporate Performance Management (CPM) is a formal term for the actions most successful companies are already taking. Below, we outline the distinct steps in the CPM life cycle.

Step 1: Plan
Develop strategy; establish metrics.
  • Forecast Market to grow 2%; competitors likely to cut prices.
  • Goal Grow market share by 5% without hurting profits or quality.
  • Budget Reduced by 5% to enable competitive price cuts.
  • Tactics Cut manufacturing costs by 9%.
  • Metrics Market share, operating costs, manufacturing costs.
Step 2: Manage
Create goals for divisions; develop ways to meet them.
  • Goal Reduce costs at factories.
  • Programs Overtime Restriction; Early Quality-Assessment.
  • Metrics Overtime at each factory, defect rate, cost per unit.
Step 3: Monitor
Analyze metrics using a methodology such as Six Sigma, Balanced Scorecard or Activity-Based Costing.
  • Status Market share not growing due to slow growth of overall market.
  • Outcome Overtime reduction beat plan in first quarter, but defect rate rose and customer satisfaction dipped.
Step 4: Adjust
Revise strategy, goals, metrics, then move on to MANAGE.
  • Revised Forecast Market to grow 1%.
  • Goal Same-grow market share 5% without affecting profits or quality.
  • Strategy Balance cost-cutting against quality, customer satisfaction.
  • Tactics End restriction on overtime; allow more if necessary to restore product quality; put emphasis on reducing cost of materials.


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David F. Carr David F. Carr is the Technology Editor for Baseline Magazine, a Ziff Davis publication focused on information technology and its management, with an emphasis on measurable, bottom-line results. He wrote two of Baseline's cover stories focused on the role of technology in disaster recovery, one focused on the response to the tsunami in Indonesia and another on the City of New Orleans after Hurricane Katrina.David has been the author or co-author of many Baseline Case Dissections on corporate technology successes and failures (such as the role of Kmart's inept supply chain implementation in its decline versus Wal-Mart or the successful use of technology to create new market opportunities for office furniture maker Herman Miller). He has also written about the FAA's halting attempts to modernize air traffic control, and in 2003 he traveled to Sierra Leone and Liberia to report on the role of technology in United Nations peacekeeping.David joined Baseline prior to the launch of the magazine in 2001 and helped define popular elements of the magazine such as Gotcha!, which offers cautionary tales about technology pitfalls and how to avoid them.
 
 
 
 
 
 

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