Business performance

Posted by Melda Research on February 7th, 2019

Business performance management entails reviewing the business performance and determining how the business can reach its goals (Martin, 2004). It is an approach of planning, measuring and monitoring the company’s business activities. Business performance management process aims at improving the business processes continuously to align the aspects of the organization with the needs of clients (Melchert & Winter 2004). The process normally helps businesses in redesigning their budgeting and forecasting processes. The reduction in the cycle time, resources commitment and costs of these activities lead to increasing in the value of stakeholders in the business.BPM is essential as it helps a business to make the most appropriate business actions. It also enables businesses to automate tasks, improve productivity, analyze risks, predict outcomes, generate new business, increase efficiency, and identify the cost saving opportunities. Through collecting and analyzing data, the business managers tend to get more information about the position of the company and they can make better decisions (Gudelj et al. 2011).

Process of implementing business performance management process

The process of implementing BPM includes monitoring, forecasting, planning and budgeting, activity design, and communication. Monitoring involves identifying the upcoming problems through observing the company and also its environment. The information supply is a core requirement in the monitoring process. Thus, it is necessary to filter information, individualize, proper structure, and present it in an adequate form. The forecasting process involves the use of information from the monitoring stage to project the future states through calculating or simulating the predictive models (Melchert & Winter 2004). In this process, it is necessary to develop the predictive or simulating models describing the company and the markets and their utilization supported.

The planning and budgeting process normally use the information created by the two processes before. In this phase, you identify the potential actions and their consequences evaluated considering the different restrictions to finding a solution to identified problems. The budget focuses on the monetary measures and restrictions, which is an essential factor for companies (Melchert & Winter 2004). A method of solving planning problems is creating quantitative models that simulated based on the alternative assumptions for certain measures. Planning and budgeting activity tend to result in a set of measures that the activity design phase elaborates. The communication of measures activity tends to affect operational management or the business process and employees. Without appropriate communication, it is not possible to realize a closed-loop management.

Implications of business performance management process on organization’s overall performance

Business performance management consists of management and analytic process supported by technology enabling businesses to define the strategic goal and measure and manage performance against the goals. Performance management aims at the systematic control and generation of the organization’s performance (Gudelj et al. 2011). The business process management usually led to the performance of organization through innovation and optimization by implementing business strategies. Good business performance management process helps everyone in the organization to know what the business is trying to achieve (Melchert & Winter 2004). It also explains the skills and competencies needed standards of performance required, and their role in helping the business achieve the goals. When everyone in the organization is aware of the organization practices, it is easy for the organization to perform effectively and achieve its objectives. The business performance management helps in obtaining regular feedback from the process outputs; thus, it is easy to be aware of the organization’s performance.


Melchert, F & Winter, R (2004). The enabling role of information technology for business performance management. The IFIP TC8/WG8.3 International Conference. 

Balaban, N Belic, K & Gudelj, M (2011). Business process performance management. Management Information Systems. 6(4)

Martin, W. (2004). Business Performance Management

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