1 / 35

BUSINESS PERFORMANCE MANAGEMENT

BUSINESS PERFORMANCE MANAGEMENT. What Is Management Control System ? . Langfield -Smith

marnin
Download Presentation

BUSINESS PERFORMANCE MANAGEMENT

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. BUSINESS PERFORMANCE MANAGEMENT

  2. What Is Management Control System ? Langfield-Smith “Management Control Systems (MCS) is the process by which managers ensure that resources are obtained and used effectively and efficiently in the achievement of the organization s objectives . MCS is a system used in an organization which collects and uses information to evaluate the performance of the organizational resources that will eventually influence the behaviour of the organization to implement organizational strategies. “Langfield-Smith, K (1997), Management control systems and strategy: A critical review, Accounting, Organizations and Society, vol. 22, no. 2, pp. 207-232.”

  3. What Is Business Performance Management ? Tuomela “Busniess Performance Management is to understand the concept of performance measurement systems we can say that performance management are known as collections of financial and non-financial performance indicators that managers use to evaluate their own or their unit s performance” Armseh, H., Salarzehi, H. danKord, B. (2010) Business Performance Management- Interdisciplinary Journal of Contemporary Research in Business, October 2010 vol 2, no 6.

  4. Relationship between MCS and BPM Business Performance Management is a key component and very important in Management Control System Kurniawan, D. (2009) PengaruhSistemPengendalianManajemen Dan PembelajaranOrganisasiTerhadapKinerjaPada Pt. Garam (Persero) di Surabaya. SekolahTinggiIlmuEkonomi: PERBANAS.

  5. Stages of Business Performance Management The step constitutes taking timely, appropriate action to change in performance uncovered during monitoring and analysis. We identify what the organization wants to achieve We develop a program of action on how to carry out the business strategy The influence and benefits of a BPM implementation become more visible in this step. “BPM Standards Group (2004). Business Performance Management : Industry Framework Document. 27p.”

  6. Business performance Management FRAMEWORK Balanced Scorecard SMART – Strategic Measurement Analysis and Reporting Technique Performance Measurement for World Class Manufacturer Performance Measurement Questionnaire Performance Criteria System Cambridge Performance Measurement Design Integrated Performance Measurement Systems Reference Model Quantum Performance Measurement Systems “Bititci U.S, Dynamics of Performance Measurement Systems, International Journal of Operations and Production Management, Vol 20, no. 6, pp 692-704. “

  7. BALANCE SCORECARD The concept of Balanced Scorecard “Kaplan, R. S, dan Norton, D.P. (1992) Using the Balanced Scorecard as a Strategic Management System, Harvard Business Review, January – February.”

  8. Each perspective Include: The goal as a link between measure and strategy Size is a tool to evaluate impementation of the objective Numerical values that represent the effectiveness of achieving a specific goal. Introduced to the program level strategy to achieve targets goal in perspective “Kaplan, R. and D. Norton (1992), “The Balanced Score Card – Measures that drive performance”. Harvard Business Review 70(4), pp: 71-79.”

  9. BALANCE SCORECARD • The advantage Balanced Scorecard approach : • Provides a comprehensive overview of the company's performance. • Balanced score card protects from local optimization. • Help to avoid information overload by keeping only measures related to strategy. “Kaplan, R. and D. Norton (1992), “The Balanced Score Card – Measures that drive performance”. Harvard Business Review 70(4), pp: 71-79.”

  10. BALANCE SCORECARD 3. Balanced Scorecard as Performance Management System “Kaplan, R. S. and Norton, D. P. (1996b), Using the Balanced Scorecard as a strategic management system. Harvard Business Review, 77.”

  11. EXAMPLE :

  12. SMART Also known as the Performance Pyramid proposed by Cross and Lynch, as a result of dissatisfaction with traditional performance measures such as productivity and financial variances. The goal is to plan the management control system performance indicators designed to define and sustain success “Ghalayini A.M., Noble J. S., (1996), “The changing basis of performance measurement”, International Journal of Operations & Production Management, Vol. 16 No. 8 1996, p. 63-80.”

  13. Performance Pyramid The Performance Pyramid (Neely, Bourne, Kennerley, 2000)

  14. EXAMPLE: DHL “Stefenson, T. (2004) Performance measurement at DHL solutions.Department of Business Administration and Social Sciences Division of Industrial Logistics”

  15. Performance Measurement For World Class Manufacture (WCM) WCM is an integrated approach is needed to obtain the forces that drive the competitive edge of each operation in the company, which is needed to produce standardized products of international reputation to meet the global requirements effectively. “Narayan V K (2001), Managing Technology and Innovation for Competitive Advantage, Pearson Education”

  16. World Class Manufacture (WCM) Table 1. Key Elements and Performance Criteria of WCM Strategy “Seyedhosseini, Mohammad and Soloukdar, A. (2011). Review and Discussion of Theories related to Dynamic Model of World Class Manufacturing Strategy. Journal of American Science, 2011”

  17. World Class Manufacture (WCM) Table 1. Key Elements and Performance Criteria of WCM Strategy “Seyedhosseini, Mohammad and Soloukdar, A. (2011). Review and Discussion of Theories related to Dynamic Model of World Class Manufacturing Strategy. Journal of American Science, 2011”

  18. World Class Manufacture (WCM) Table 1. Key Elements and Performance Criteria of WCM Strategy “Seyedhosseini, Mohammad and Soloukdar, A. (2011). Review and Discussion of Theories related to Dynamic Model of World Class Manufacturing Strategy. Journal of American Science, 2011”

  19. EXAMPLE: Chrysler Group LLC “Garberding, S. (2010) World Class Manufacturing. Chrysler Group LLC 2010‐14 Business Plan November 4, 2009”

  20. Performance Measurement Questionnaire -Dixon et al.- Presents a performance measurement questionnaire. Questionnaire helps an organization to identify areas for improvement, in order to determine the effectiveness of existing performance calculations and to improve calculation performance. “Dixon JR, Nanni AJ, Vollmann TE (1990). The New Performance Challenge: Measuring Operations for World-class Competition. Homewood, Ill: Dow Jones-Irwin.”

  21. Example: “Bourne, M. and Neely, A (2003) Implementing performance measurement systems: a literature review. Int. J. Business Performance Management, Vol. 5, No. 1, 2003”

  22. Performance criteria system The main problem of choosing the performance criteria is a decision whether the performance criteria is included in the system. Evaluating the organization performance, every indicator which need improvement or harm is considered a relevant criteria. “Globerson, H (1985) Issue in developing a performance criteria system for an organization, International Jurnal Prod. Res, 1985, vol. 23, no. 4, 639 – 646.”

  23. Development & Guidance • Development • Guidance “Globerson, H (1985) Issue in developing a performance criteria system for an organization, International Jurnal Prod. Res, 1985, vol. 23, no. 4, 639 – 646.” Choosing a set of performance criteria that suitable Measure the perfomance criteria Determine the standard of the performance criteria Plan a feed back to respond an a gap between the actual and the standard Rise from an objective of the companya Possible to compare between the same business The objective is clear Discussion with stakeholder The value must be same or more or less between the same unit of business

  24. Technique • Determine the importance of Performance Criteria • Weighting technique • Evaluate the Performance Criteria • Work measurement • Analysis of past organizational performance • Benchmarking “Globerson, H (1985) Issue in developing a performance criteria system for an organization, International Jurnal Prod. Res, 1985, vol. 23, no. 4, 639 – 646.”

  25. The main issue in establish the measurment • Unit of measurement • Level of Aggregation • Measurement Accuracy • Static approach • Dynamic approach • Cross-check mechanism • Data collection analysy approach “Globerson, H (1985) Issue in developing a performance criteria system for an organization, International Jurnal Prod. Res, 1985, vol. 23, no. 4, 639 – 646.”

  26. Cambridge Performance Measurement Design Process Phase in designing the Cambridge Performance Measurement Process Design: • Design • Development • Documentation • Testing • Publication • Acceptance “Neely,A; Bourne, M and Kennerley,M (2000) Performance measurement system design: developing and testing a process-based approach. International Journal of Operations &Production Management, Vol. 20 No. 10, 2000, pp. 1119-1145. MCB University Press.”

  27. Cambridge Performance Measurement Design Process Designing, Implementing, and Updating PerformanceMeasurement System System Design Implementation of measures Use of the measures Obstacles to implementation Updating Process “Bourne, M.; Mills, J.; Wilcox, M.;Neely, A.; and Platts, K. (2000)Designing, implementing and updating performance measurement systems. International Journal of Operations &Production Management, Vol. 20 No. 7, 2000, pp. 754-771.”

  28. Integrated Performance Measurement System Reference Model Integrated Performance Measurement Systems Reference Model is an Integrated Performance Measurement System as an information system that enables the performance management process to work effectively and efficiently. This model highlights two main aspects of the performance measurement system that is Integrity and Deployment “Bititci, et al. (1998), “Integrated Performance Measurement Systems: a Development Guide”, International Journal of Operations & Production Management, Vol. 17, No. 5-6, pp. 522-534.”

  29. Quantum performance Measurement system • It is a performance measurement system, the implementation of corporate strategy promoted and achievement level can be control. This approach was developed in the late 80s and early 90s by the consulting firm Arthur Andersen & Co. • 3 categories of performance measures that are the focus QPMS. • 1. Costs • 2. Quality • 3. Time http://de.wikipedia.org/wiki/Quantum_Performance_Measurement_System)

  30. Quantum performance Measurement system 4 elements of valuation models http://de.wikipedia.org/wiki/Quantum_Performance_Measurement_System)

  31. The most widely used models Balance ScoreCard “Kaplan, R. S, dan Norton, D.P. (1992) Using the Balanced Scorecard as a Strategic Management System, Harvard Business Review, January – February.”

More Related