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The term business performance management software is used to describe a niche product that measures the actual performance of the firm, comparing this information against target performance values. Business performance management software is also known as corporate performance management, operational performance management or enterprise performance management software. The software itself is considered a business intelligence product.
There are three steps involved in the implementation and utilization of a business performance management software solution: selection of the appropriate application, identification of key performance indicators (KPIs), and implementation of the software. The software itself is quite large and is typically installed at an enterprise level. The program needs to access the databases and tables of information collected in the accounting, human resources, materials management, sales, and other related systems.
In a large organization with an existing enterprise resource system, there are specific products designed to meet these needs. For standalone accounting software architecture, changes to the overall structure may be required to transport the data into the data warehouse and utilize the business performance management software. It is very important to understand the basic system architecture of the current system, to determine the functionality that will be required in the business performance management software application. This software is designed for medium to large enterprises, and is priced for enterprise-level implementation.
The identification of key performance indicators is central to the implementation and effective use of this type of software. Business process analysis should be completed to determine what the priorities are for the organization, the best data to track this activity, and the metrics available in the various systems. For example, a courier company may have a KPI that all invoices will be paid within five days of invoice date, to take advantage of the payment discounts. The invoice date and processing date must be included in every invoice document processed in the accounting system. In addition, the business performance management software needs to be configured to track this activity and report the number of transactions inside and outside this range, along with the costs for missed discount opportunities.
The implementation of this type of software is a six- to 12-month project, and will require significant information technology staff. Skills required include technical, hardware, software configuration, and programming. Training and documentation for business users will also be required prior to launch of any solution. The responsibility for maintaining this software, updating the KPIs, and reviewing the reports typically falls into the financial services area.