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Level 2 – Understanding the Value |

Level 2 – Understanding the Value


At the second level people are slowly starting to understand the value of information and performance management for the organization.

An operations and development plan exists in order to develop and implement capabilities in the area. The internal support from the organization, however, is still very limited and it is difficult to get funding for performance management processes. What data marts the company has are not integrated together, so data is still not easily available and neither is it high quality. As a result, the business does not have faith in the quality and consistency of the information. Nonetheless, at this level the organization does at least recognize the need for common standards, structures and procedures.

Performance management information is only distributed occasionally. Reporting is starting to cross the borders of functional processes, such as sales and purchasing. There are some interactive reporting systems and tools which can be used to drill-down to the data in more detail.

Performance measurement is financially oriented and most measurement takes place at the unit or departmental level. There are no common strategic measures, or if there are they are inconsistent. Besides reporting, the most common performance management process is budgeting, which is generally focused on the operational level and on an annual budget. However, some performance management processes are used in decision-making. Organizations at this level may be starting to think about establishing a performance management competence centre.

Key Capabilities

  • Operations and development plan
  • Data marts
  • Budgeting
  • Creation of strategic goals
  • Financially focused solution
  • Interactive reporting system
  • Formal performance management method in use

Next steps

  • Creation of a common organizational culture
  • Adaption of fact-based decision-making
  • Base decisions and actions on understanding of performance management systems
  • Understand the factors that have an impact on the business
  • Get top management support
  • Begin to form a performance management competence centre
  • Create a common set of standards and vocabulary
  • Creation of data warehouse
  • Creation of organization-wide technology management and architectural design

Maturity Levels

Components in detail

Component Description for level 2
Communication Communication is still in its infancy; organization attempts to communicate its goals and objectives
Information Business understands the value of information; no trust in information quality and consistency; much redundant and inconsistent data
Intangible assets Organization starts to understand PM and its value; information systems cannot be exploited sufficiently; limited senior management support
Management and responsibility Project planning and management is based on previous experience; costs, schedules and functionalities are monitored
Methods and tools Effective collection of transaction data; discussion about business intelligence and data warehousing; a formal PM method in use; operations and development plan
Performance Performance measurement is financially focused; departmental level measurements; historical metrics; PM not done at the individual level; no common strategic measures; first KPIs are being built;  budgeting; planning; consolidation; strategy monitoring and execution
Scale and scope Improved coordination between business units and functional groups; first steps towards functional cross-border reporting
Strategy and Business Strategies to achieve organizational targets start to evolve; the goals are defined; PM helps in the creation of strategic goals; PM is focused on monitoring the goals; only a small group of people are responsible for strategic planning; funding comes from business units on a project basis
Technology Use is focused largely on basic functionalities; data marts; some data warehouse projects; tools in use, but they are in silos; interactive reporting systems; ready software suites; no proper information system for collecting the data

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