Top Ten Reasons for a Performance Measurement System
- It improves the bottom line by reducing process cost and improving productivity and mission effectiveness.
- A performance measurement system such as the Balanced Scorecard allows an agency to align its strategic activities to the strategic plan. It permits — often for the first time — real deployment and implementation of the strategy on a continuous basis. With it, an agency can get feedback needed to guide the planning efforts. Without it, an agency is ‘flying blind’.
- Measurement of process efficiency provides a rational basis for selecting what business process improvements to make first.
- It allows managers to identify best practices in an organization and expand their usage elsewhere.
- The visibility provided by a measurement system supports better and faster budget decisions and control of processes in the organization. This means it can reduce risk.
- Visibility provides accountability and incentives based on real data, not anecdotes and subjective judgements. This serves for reinforcement and the motivation that comes from competition.
- It permits benchmarking of process performance against outside organizations.
- Collection of process cost data for many past projects allows us to learn how to estimate costs more accurately for future projects.
- If you are in a US Federal agency, it’s the law. The Government Performance and Results Act of 1993 requires a strategic plan, and a method of measuring the performance of strategic initiatives.
- It can raise you agency’s Baldrige score, which can serve to increase its long-term chances of survival.
©1998 Paul Arveson