Concept of Corporate Performance Analysis
Why Measure Performance?
system is to provide feedback, relative
to corporate goals, that increases the
corporation’s chances of achieving these
goals efficiently and effectively.
The ultimate aim of a performance measurement system:
To improve the performance of the
organization. If management can get
performance measurement right, the
data it generates will tell managers where
the company is, how it is doing, and
where it is going.
Enterprise Performance Management (EPM)
For competitive reasons, management needs to measure the end-to-end performance of the enterprise directly.Enterprise Performance Management
- provides the foundation for new enterprise architecture.
- Traditionally, business measurement – what analysts call “business intelligence” – has been based on the analysis of data extracted after the fact from past operations of implicit business processes.
- nThe BPMS, on the other hand, enables business analysts to do real-time process analysis – to directly measure the business value of explicitly defined business processes.
- nThese processes can now be optimized on the fly without the need for additional software development, tremendously simplifying the management of their design over their lifetime.
The Balanced Scorecard is a frameworkfor designing a set of measures foractivities chosen by management as being thekey drivers of the business.By having four distinct perspectives (financial,customer, internal process and innovationand learning) it promotes a more holistic
View of the business.
Benchmarking is the approach ofcontinuously measuring products,services, and practices against Tough standards set by competitors or renowned leaders in the field.
Economic Value Added (EVA)
Economic Value Added (EVA), or economic rent, is a widely recognized tool that is used to measure the efficiency with which a company has used its resources. In other words, EVA is the difference between return achieved on resources invested and the cost of resources. Higher the EVA, better the level of resource utilization.
Measuring Coach’s Effectiveness
(LCA) and Total Cost Assessment (TCA) are two types of CP indicators that help managers understand the practical implications of CP and make right decisions.
Approaches to Corporate Performance Analysis
- The advantages and disadvantages of each approach,
- The prerequisites of each approach,
- Are the different approaches mutually exclusive?
- Concurrent ,
- Multidimensional measurements of ongoing operations in all segments of the business,
- Balance financial and non-financial measures,
- Balance inputs, processes, outputs and outcomes measures,
- Balance tangible and intangible results,
- Balance leading [future performance drivers] and lagging indicators,
- Establish cause – effect links between inputs, outputs and outcomes,
- Measure performance against strategic mission, vision, goals, and objectives,
- Aims at performance improvement.