Imagine a board meeting five years from now. It is easy to imagine a meeting, for example, to discuss a downward trend in profits. Instead of having to discuss what questions should be studied and brought back for later review, it should be possible to ask and answer questions right then, using a performance management system that allows drilldown into all the relevant areas. For example, the CFO should be able to look at the trends in all of the components of net income. Perhaps the CFO discovers the most obvious cause of the declining income is increased costs in a particular product line. The VP of Supply Chain looks up the product line and identifies increased costs in a category (such as feedstock or oil). Then the VP of Procurement looks up that category and identifies spend breakdown and determines to identify alternate sources of supply. It is not hard to imagine that alternate sources are presented on the dashboard. One could be chosen and submitted for a risk review. The Chief Risk Officer can pull up a dashboard and start to determine if there are unacceptable risks. The head of customer service can report on any quality problems that may have had an effect on the market. The VP of Sales can look for other contributing factors reported from the field that may have dampened sales. The VP of marketing can analyze how to reshuffle resources to prop up demand in the desired area. During all this, the CIO and CTO can both beam happily now that everyone is speaking the same language. At the next board meeting, it would be just as simple to see if the adjustment worked. The VP of Procurement could show the costs from the new supplier. The VP of Supply Chain’s dashboard shows that costs have gone down and so the product line margin is looking good again. The CFO agrees and indicates to the CEO that the revenue on the dashboard is trending back up.
It is possible to imagine an even more advanced integration of performance management, risk and compliance management, and business process management. In a world in which a company is run according to explicitly defined end-to-end processes, it will be possible to look at a goal that the company is trying to achieve in an integrated fashion. One side of the goal will be the business process used to achieve that goal, another side will be the performance management metrics that are used to track the progress of the execution of the process, and the third side would be the risk indicators and compliance processes that must be performed as part of that processes.
Any goal in business involves all three of these dimensions, but now they are treated more separately than they should be. Any attempt at optimization involves all three as well. The end result of this kind of strategy-driven execution is the ability to rapidly reconfigure your business with confidence that no important issues are being ignored.