Expert Performance Management Boosts Bottom Lines — See How Your Business Stacks Up
Stephen R. Covey famously identified seven habits of highly effective people, so it's no big leap to surmise that highly successful businesses share common characteristics, too. In fact, that's the conclusion of a fascinating new report from The Enterprise Strategy Group (ESG).
The ESG report, which you can download here, concludes that companies can derive considerable real-world business value from their proficiency in performance management — the collection of technologies, people, and processes used to monitor and remediate issues throughout the application stack. Edwin Yuen of ESG recently spoke with Riverbed Connections, sharing details on the report's methodology and key findings.
"In our surveys," says Yuen, "we were trying to determine what we call the 'Performance Management Maturity' (PMM) of each of the participating organizations. In any given company, is performance management a center of excellence, or just a side thing some people are doing?"
With many aspects to consider, ESG created a 40-point scoring system and segmented its respondents along four dimensions (see Table 1):
- Business alignment: Vision, strategy, metrics, and measurement
- Organization: People, leadership, and collaboration
- Process: Documentation, consistency, and continuous improvement
- Technology: Tools, capabilities, and integration
An organization that did well across all areas of performance management became an "Expert"; lesser scores led to designations of "Aspiring" and "Nascent." As Yuen and team discovered, these scores had strong correlations to each company's real-world business performance.
Characteristic: Smoother app development (page 4)
Applications are the backbone of today's digital business, so it's telling that ESG found clear synergy between PMM and the ease of successful application development.
"Our performance management 'Experts' tended to experience a significantly smoother application development process," says Yuen. "For example, 'Nascent' organizations reported two times as many internally developed applications releasing behind schedule than ‘Expert’ organizations."
As organizations begin to implement DevOps principles, the ability of IT to support the growing size and speed of internal development initiatives will become more critical. So it's also interesting to note that every "Expert" organization used agile development practices, versus 70% of "Aspiring" and just 58% of "Nascent." Organizations with a higher level of performance management sophistication are well placed to enable faster delivery of more enhanced applications with fewer break/fix events.
Characteristic: Fewer problems with apps (page 5)
No company can avoid problems entirely, but the study showed a positive correlation between increasing PMM and the uptime of applications, time to resolution, and avoidance of negative impacts on end-users.
For example, 59% of "Expert" organizations reported their mean time to resolution as less than 30 minutes. That's 1.8x higher than "Aspiring" (32%) and 2.5x higher than "Nascent" (24%).
Characteristic: IT is a competitive differentiator (page 7)
IT used to be seen as a service that monitored infrastructure and fixed problems. But today's CIOs need to go further, demonstrating IT's ability to drive actual value in the business's bottom line. More than a mere infrastructure provider, IT wants a seat at the table.
"'Expert'-group performance managers were much more likely to see their IT org as a competitive differentiator for their company, as opposed to just a supporting group," says Yuen. "In fact, the difference is pretty stark: 41% of respondents from 'Expert' organizations reported that their line-of-business stakeholders viewed them as a competitive differentiator, versus just 11% and 6% of the less mature groups."
Characteristic: Ongoing PM evaluation and investment (pages 7–8)
Once a company has a performance management strategy in place, it cannot just rest on its laurels. A whopping 69% of "Expert" organizations evaluate both the tools and processes multiple times a year, versus just 25% and 10% of "Aspiring" and "Nascent" companies, respectively.
"They’re not only monitoring with greater width and breadth," says Yuen. "They’re also consistently reviewing the processes and asking, 'Are we doing this the best way? Is the process optimal? Are these tools appropriate to the task?'"
Assess how your organization compares
We've seen that a mature approach to performance management contributes to uniformly positive outcomes for organizations that invest in the necessary resources, and lesser results for those that do not. Where does your company fall on the spectrum?
To help you ascertain your own org's performance management maturity, Riverbed created a no-obligation self-assessment tool that will guide you through a similar array of questions as was used in ESG's report. The assessment takes only a few minutes to complete, and the resulting analysis will show your strengths and also point out areas for improvement.
Check out the PMM self-assessment tool and full ESG report to see where your company ranks in the bigger picture of performance management maturity.