Mar 30, 2008 (02:03 PM EDT)
Gartner BI Summit 2008: Q&A With Howard Dresner

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Howard Dresner Howard Dresner

You're appearing at the Gartner BI Summit along with Dr. David Norton in a presentation on "Performance Management: Yesterday, Today and Tomorrow." What's your key message on the "today and tomorrow" part?

It's that the problem with performance management is not technology, it's culture, it's organization and it's skills. It's about the commitment that the organization has to transparency and accountability. We humans don't want to be transparent and we really don't want to be held accountable. So if you think about what senior management has to do to affect enterprise performance management, it's all about changing that culture and saying, "from this day forward, we are going to be accountable to the strategy, and we're going to be transparent. There will be no more hoarding of [information] because we like to protect ourselves."

Some say the market is really 95-percent focused on financial performance management, so what do you mean when you use the term "enterprise performance management?"

Well, financial performance management is where it starts. I don't think that's a bad thing; the problem is when that's where it stops. Financial performance management brings in a solution by finance, for finance. You want financial information? They'll say, "we'll generate a report for you, but you can't have access to the system or to the data." Once again, that's human nature. That gives them a distinct advantage over their peers within the organization. Now if they evolve beyond that, then you start having performance management by finance but for everyone, and it starts moving across the enterprise to sales, manufacturing, HR and so on.

Where you really want to get to is the notion of enterprise performance management, which is financial performance management, supply chain performance management, sales performance management — everybody having access to this sort of facility in a very integrated way. Most organizations just aren't there yet. Some organizations have achieved enterprise performance management, but they are not large enterprises. Large organizations have multiple cultures, and they've typically had acquisitions over the years, so they may have multiple systems, approaches and definitions. I won't say it's impossible, but it's extraordinarily difficult for large organizations to achieve enterprise performance management.

How is it that smaller organizations can succeed?

Because of the span of control. In smaller or midsize organizations, you can't hide. A good friend of mine works in the hospitality industry, and she is effectively the CIO, but she doesn't call herself that. She says, "I'm really a marketing person," but she drives, manages and directs all of the IT initiatives. She is also completely aligned with the business. There is no such thing as saying, "I'm in IT, and I'll get back to you." It doesn't work that way. If you were in a meeting with these guys, you would not be able to easily pick out who is the business person and who is the IT person.