Performance Management

Performance management target is the achievement of specific results, that must be understood and valued according to the stakeholders satisfaction; in other words, we assume that the performance refers to the organization's ability to effectively implement its strategy, in the interests of relevant stakeholders (Otley, 1999).

This definition, underling the concept of Corporate Performance Management (CPM), integrate four main elements:

1. business strategy formalization and communication;
2. alignment between organization, technology and architecture processes;
3. analysis of the value created by the whole business operations, it will generate the elimination or the outsourcing of activities that do not add value;
4. design and use of a suitable set of performance measures (KPIs), articulated on the main critical areas.

An appropriate system of CPM will be developed through five main stages:

• definition of critical objectives for the success of the organization;
• development of strategies and plans for achieving these objectives;
• definition of performance levels to be achieved with respect to critical dimensions highlighted in the previous points;
• identification of appropriate incentive systems for managers in order to encourage the achievement of defined performance targets;
• establishment of effective information flows, in order to manage the correct knowledge diffusion.

This final phase focuses on the information systems requirements in support of performance management, emphasizing the role of facilitators in knowledge management.

The KPIs theories was developed in the late seventies in response to a study done by MIT (Massachusetts Institute of Technology), which led to the development of Critical Success Factor Method.

Two are the KPIs levels:

• Indicators of the first level, synthetic and comprehensive character, they coincide with the strategic objectives and are related to the whole company;
• Indicators of a second level relate to the results of specific activities or actions and referring to particular segments of the company.

While differing on the operational level, these proposals have some common and recurrent features:

• are multidimensional models;
• bring back the performance indicators;
• propose logical link maps between the measures themselves;
• formance.