The CAM-I Performance Management Maturity Framework
Over Three Decades of Industryled Collaborative ResearchThe CAM-I Performance ManagementMaturity FrameworkCAM-I ConfidentialGlobal Leadership in Cost, Process and Performance Management
Performance Management Interest GroupOver Three Decades of Industryled Collaborative ResearchCAM-I recognized the need to develop a standardized and integratedview of Performance Management. The interest group has developeda practical framework that will allow any organization to assess its levelof performance management maturity.The framework consists of a core group of Enablers and four levels ofMaturity. This provides a model relevant to all organizations inoptimizing their business results.More importantly, in addition to the maturity framework, the researchrecommends specific improvement techniques to assist in areas ofperformance that require enhancement. At the same time, the researchcautions attempts to implement new techniques without taking intoconsideration the organization’s capability of effecting change.CAM-I Confidential
Over Three Decades of Industryled Collaborative ResearchPerformance ManagementMaturity FrameworkThe full version of this deliverable is for Membersonly and you can contact Ashok Vadgama, CAM-IPresident atashok@cam-i.orgor call him at 512-296-6872 for more informationCAM-I Confidential
.Figure 1FRAMEWORKOver Three Decades of Industryled Collaborative ResearchCAM-I Confidential
Over Three Decades of Industryled Collaborative ResearchPerformance Management vs. PerformanceMeasurementTwo terms often used interchangeably are Performance Management andPerformance Measurement. Before performance can be improved, PerformanceManagement concepts need to be in place before measuring performance. For thepurpose of this research initiative, PMIG (Performance Management InterestGroup) is using the following definitions:Performance Management is the practice of organizing, integrating, automating,and analyzing business methodologies, processes, and systems to drive successfulbusiness performance.Performance Measure – The specific representation of a capacity, process, oroutcome deemed relevant to the assessment of performance.Performance Measurement – The process of developing measureable indicatorsthat can be systematically tracked to assess progress made in achievingpredetermined goals.CAM-I Confidential
Key Components Behind The ConceptOver Three Decades of Industryled Collaborative ResearchPerformance Enablers: Recognition that every organization is made up offunctions and elements of its business that are both unique and common.Performance Management Maturity Levels: Recognition that not allorganizations perform Enablers the same way, or with the same efficiency oreffectiveness. Those that demonstrate higher levels of effectiveness, contributingto greater business success, represent organizations performing at higher“maturity.”Performance Management Improvement Techniques: Recognition that actionis needed to improve Performance Enablers.Change Capability: Recognition that implementing improvement initiatives toenhance performance has had, in general, a disappointing record of success andsustainability.CAM-I Confidential
Performance Management EnablersOver Three Decades of Industryled Collaborative ResearchCAM-I Confidential
Over Three Decades of Industryled Collaborative ResearchPerformance Management EnablerElementsPerformance Management EnablersEnablers s / CharacteristicsBusiness / OperationalManagementA system of actions, communications andcontrols for developing and executing plansto achieve strategic goals and objectives. 3 Establish priorities Set targets Identify key projects Resource allocation Shared services Operational planning and budgeting Capital planning and budgeting Project management Monitor/measure Alignment Accountability Transparency OwnershipCustomer RelationshipManagementA combination of policies, processes, andstrategies implemented by an organization tounify its customer interactions, buildcustomer relationships, and provide a meansto track customer information.4 Customer segmentation Customer intelligence Customer database Communication Responsiveness Integration ContinuityFinancial ManagementThe management of financial resources tosupport accountability and stewardship.5 Financial accounting and control Financial analysis (e.g., variance analysis) Managerial accounting (e.g., costmanagement) Internal controls Financial reporting Transparency Integrity Timeliness Reliability Review periodicity AdvisoryCAM-I Confidential
Performance ManagementEnabler ElementsOver Three Decades of Industryled Collaborative ResearchPerformance Management EnablersEnablers s /CharacteristicsBusiness /OperationalManagementA system of actions,communications and controls fordeveloping and executing plans toachieve strategic goals andobjectives.3 Establish priorities Set targets Identify key projects Resource allocation Shared services Operational planning and budgeting Capital planning and budgeting Project management Monitor/measure Alignment Accountability Transparency OwnershipCustomerRelationshipManagementA combination of policies,processes, and strategiesimplemented by an organization tounify its customer interactions, buildcustomer relationships, and providea means to track customerinformation.4 Customer segmentation Customer intelligence Customer database Communication Responsiveness Integration ContinuityFinancialManagementThe management of financialresources to support accountabilityand stewardship.5 Financial accounting and control Financial analysis (e.g., varianceanalysis) Managerial accounting (e.g., costmanagement) Internal controls Financial reporting Transparency Integrity Timeliness Reliability Review periodicity AdvisoryCAM-I Confidential
Performance Management Interest GroupOver Three Decades of Industryled Collaborative ResearchPM Maturity FrameworkMaturity LevelsLevel OneRudimentaryLevel TwoEstablishedPM Enablers1. Strategic Management2. Business/Operational Management3. Financial Management4. Risk Management5. Customer Relationship Management6. Process ManagementMaturityGrowth7. Information Management8. Supply Chain Management9. Innovation Management10. Human Capital Management11. Knowledge Management12. Organizational ManagementCAM-I ConfidentialLevel ThreeEffectiveLevel FourAdaptive
Performance ManagementEnabler MaturityOver Three Decades of Industryled Collaborative ResearchPerformance Management Enabler MaturityEnablers ofPerformanceManagementBusiness /OperationalManagementLevel One:RudimentaryLevel Two:EstablishedLevel Three:EffectiveLevel Four:AdaptiveNon-systematic,non-periodic, andreactive Elements areperformed on anad hoc andtactical basis Business andoperational plansare not related toorganization’sstrategic plan Budgetformulationprocess is notintegrated withany formalplanningprocesses andseen largely as afinance functionStable and repetitiveInternally efficient andcontinuously improvingExternally efficient anddynamic Planning process iscohesive and closedloop with somerelationships to theorganiza-tionalstrategic plan but isnot fully integrated Reflects consensusview of enterpriseobjectives Budget formulationprocess isdecentralized to allareas responsible forrevenue/ expendituregeneration withoversight by thefinance function Operational plans are wellunderstood by employeesand where they cancontribute Budget formulation processis seen as a key functionwithin all areas responsiblefor revenue / expendituregeneration Budget process iscomplementary to planninginitiatives and planningoutcomes are monitored andmeasured Operational plans are fullyintegrated with suppliers,customers, and employees Planning enablesemployees to be proactive Plans & budgets are basedon rolling forecasts and notlimited to an annual event Measurement andaccountability of planperformance is in place Best practicesCAM-I Confidential
Performance ManagementEnabler MaturityOver Three Decades of Industryled Collaborative ResearchPerformance Management Enabler MaturityEnablers ofPerformanceManagementBusiness /OperationalManagement(continued)Level One:RudimentaryLevel Two:EstablishedLevel Three:EffectiveLevel Four:AdaptiveNon-systematic,non-periodic, andreactive Limited inputduring budgetpreparationprovided by areasresponsible forrevenuegeneration andexpenditurecommitments No resourceallocation basedon the strategicplan Focused oncorrectinghistoricaldeficienciesStable and repetitiveInternally efficient andcontinuously improvingExternally efficient anddynamic Budget processrefers to planninginitiatives but is notfully integrated Rudimentaryresource allocationbased on thestrategic plan Efficient resource allocationbased on the strategic planCAM-I Confidential
Performance ManagementEnabler MaturityFinancial ManagementOver Three Decades of Industryled Collaborative ResearchEnablers ofPerformanceManagementLevel One:RudimentaryLevel Two:EstablishedLevel Three:EffectiveLevel Four:AdaptiveNon-systematic,non-periodic, andreactiveStable and repetitiveInternally efficient andcontinuously improvingExternally efficient anddynamic Financialaccounting isgoverned more byhabitual practicerather than bysupporting andbeing connectedto enterprisestrategy Financial controlis used primarilyby the accountingdepartment as atool to determinedepartmentalcompliance Financialanalysis andreview of results(reporting) areperformed largelyby accountingstaff as opposedto areas that havebudget orexpenditures Financialaccounting andcontrol is usedjointly by thedepartmentresponsible Financialanalysis (budgetvs. actual) isperformedregularly by thedepartmentresponsible andthe financefunction Some simplisticmanagerialaccountingmethods in place Financial accountingand control isintegrated intoongoing operations Financial analysis isbased on directlinkage to inputs andactivities Managerialaccounting methodsused for monitoringand improvingbusiness operationsCAM-I Confidential Financial accounting andcontrol is fully integratedacross all departmentaloperations and is aligned withthe enterprise strategy Managerial accounting isowned equally by all areaswithin the organization anduses sophisticated methodsused for optimizing businessresults
Over Three Decades of Industryled Collaborative ResearchPerformance Management ImprovementTechniquesPurpose and UseImprovement techniques are a list of business tools or solutionsdesigned to improve all processes and systems in the organizationin order to achieve higher levels of performance.The concept of using an improvement technique to improveperformance is not new. In fact, numerous books and publicationshave been written over several decades that present and promoteuncounted ways organizations can improve performance.CAM-I Confidential
Over Three Decades of Industryled Collaborative ResearchPerformance ManagementImprovement TechniqueCAM-I Confidential
Over Three Decades of Industryled Collaborative s ReengineeringCapacityManagementLean/Six SigmaPerformance Management ImprovementTechniquesDefinitionSpecific TechniquesValue Provided inImproving PerformanceThe radical redesign of aprocess, product, orservice (as opposed tothe incrementalimprovement associatedwith continuousimprovement efforts).19A process used tomanage utilization of allassets to ensure thatcurrent and futurebusiness requirementsare met in a costeffective manner.20Business Process ModelingProcess SimulationRightsizingEnables the organization to becomestronger and more successful in themarketplace by greatly simplifying aprocess, product, or service.Throughput AnalysisCapacity PlanningConstraint AnalysisCapital Justification /AssessmentDemand/WorkloadForecastingReturn On InvestmentAnalysisLean OperationsSix SigmaJust in TimeKanbanKaizenTotal Quality ManagementISO 9000Total ProductiveMaintenanceContinuous ProcessImprovementRoot Cause AnalysisOptimizes performance efficiency byminimizing idle capacity. Assists withoperational planning and forecastingof future capacity requirements injustifying financial investments.Business improvementmethodology thatfocuses on qualitythrough speed (Lean)and eliminating defects(Six Sigma).21CAM-I ConfidentialEnables organizations to betterallocate resources to value-addedactivities and improve quality.Focuses on efficiency improvementsto streamline and optimizeoperational performance.
Performance Management Interest GroupOver Three Decades of Industryled Collaborative ResearchIdentify PM Improvement TechniquesFor each Enabler, show which Improvement Techniques could \help to improve Maturity Level :Example:CAM-I Confidential
Business Process Re-EngineeringCapacity ManagementL3L3L3L2L3L2Human Capital ManagementInformation ManagementL2L3Knowledge ManagementL3Risk ManagementL2Strategic ManagementL3Supply Chain ManagementL2L3L4L3L2L3L3L2L2Organization ManagementProcess ManagementL3L2L2L3L2L3Innovation ManagementL4L3L3Value Chain AnalysisBusiness IntelligenceL3Target CostingBenchmarkingL2Lean/Six SigmaBalanced ScorecardBusiness/OperationalManagementCustomer RelationshipManagementFinancial ManagementActivity-Based ManagementOver Three Decades of Industryled Collaborative ResearchPerformance Management Enabler LevelsUsing Improvement TechniquesL3L3L2L3L2L2L2L3L3L3L3L3CAM-I ConfidentialL3L3L3L4L2
CAM-I and ChangeOver Three Decades of Industryled Collaborative ResearchThe integration of this research with the ongoing PerformanceManagement research led to the decision to treat ChangeManagement in a more holistic way. Therefore, we recommendthat, before charging off to identify which techniques should beadopted to improve performance, it is essential to review theorganization’s capability to adapt to change, depicted in Figure5 Integration of Performance Maturity and Change Capability.CAM-I Confidential
Integration of Performance Maturity andChange CapabilityOver Three Decades of Industryled Collaborative ResearchChange CapabilityA structured approach to change in individuals, teams,organizations and societies that enables the transition from acurrent state to a desired future state.PM Maturity Level1RudimentaryChange Capability5Fully Implemented4Considerable3Moderate2Minor Evidence1AbsenceCAM-I Confidential2Established34EffectiveAdaptive
Over Three Decades of Industryled Collaborative ResearchRecommended Approach on UsinngPerformance Maturity as a six stepapproachCAM-I Confidential
Example - Maturity Assessment ResultsOver Three Decades of Industryled Collaborative ResearchCAM-I Confidential
Over Three Decades of Industryled Collaborative ResearchExample - Change Capability vsMaturity ResultsCAM-I Confidential
Another ExampleOver Three Decades of Industryled Collaborative ResearchAs shown, the Enabler, Process Management, can use six different Technique Categories toimprove maturity, and Risk Management can use two.Since Capacity Management wasidentified as a Technique Category that could improve both Process Management andRiskManagement, the management team decided to investigate this Improvement.CAM-I Confidential
Further Research and PMMF DevelopmentOver Three Decades of Industryled Collaborative ResearchThe PMMF represents a framework that portrays a collective andcomprehensive view of the factors that affect business results. Beingthe result of collaborative research and debate, it represents anunbiased point of view of performance management, not scripted tosell or “pitch” a new product, yet it’s a conceptual framework that hasgreat potential for continued development in order to provide practicalapplication for businesses. As is, the framework is a useful tool forthinking about improving performance, but success in applying theframework will be enhanced through subsequent efforts.CAM-I Confidential
Further WorkOver Three Decades of Industryled Collaborative ResearchAssessment Tool – To effectively apply and utilize the concepts presented in thePMMF, a diagnostic assessment tool or capability could be used to greatly enhancethe value of the PMMF to organizations. By developing survey questions that“test” respondents’ answers against the defined maturity levels, the PMMF can beapplied to a broad audience. In addition, a survey tool can be crafted in a mannerthat helps mitigate potential skewing of results where a respondent knowingly orunknowingly answers questions biased towards an intended maturity level.Case Study Assessment – A case study application of the PMMF withorganizations on a trial basis would serve the purpose of testing the content of theframework against real business situations to help refine the description andcontent of the maturity levels.CAM-I Confidential
Further WorkOver Three Decades of Industryled Collaborative ResearchImprovement Techniques Database – An important distinction in this PMMF isthe differentiation between Enablers and Improvement Techniques. The formerrepresents an inherent capability performed by an organization; the latter representsa means by which an Enabler is improved. The PMIG developed an initial databasethat correlates appropriate improvement techniques within the maturity framework.Further developing and refining this database will serve as a critical tool to helpguide an organization in identifying the most appropriate means of maturingperformance.Performance Measures – Just as the content of the maturity levels can be refinedthrough case study assessment, the framework can be further refined by identifyingtypes of metrics that are in use at different maturity levels. The current contentprovides a descriptive depiction of maturity; adding quantitative or qualitativemetrics will help provide a more concise understanding and measurement ofmaturity levels.CAM-I Confidential
Further WorkOver Three Decades of Industryled Collaborative ResearchBenchmarking Capability – If an assessment tool is developed to surveyorganizations on maturity levels, this could serve as the basis for creating adatabase of results that could be used for benchmarking purposes. By profilingorganizations (by industry, size, market, etc.), the results could be used forcomparative analysis of like organizations.Industry-specific performance framework – The PMMF has been developedwithout emphasis or focus on any specific industry. As such, the language is“generic,” and might not highlight industry-specific issues. The current frameworkcould easily be rewritten for specific industries or uses that would allow the use ofindustry-relevant information in order to provide more meaningful results fororganizations.CAM-I Confidential
Performance Management MaturityFramework - ConclusionOver Three Decades of Industryled Collaborative ResearchEvery organization, whether privately operated or publiclymanaged, must be concerned with performance management to besuccessful. Leading organizations are continually gauging theirperformance maturity and making adjustments where necessary tostay ahead of their competition. Without question, performancemanagement has many different views, in fact as many as there areorganizations. The Performance Management Maturity Frameworkprovides the ability for organizations to holistically assess theirperformance maturity and understand the most effective means toimprove performance, using one consistent approach.CAM-I Confidential
Performance Measurement. Before performance can be improved, Performance Management concepts need to be in place before measuring performance. For the purpose of this research initiative, PMIG (Performance Management Interest Group) is using the following definitions: Performance Management is the practice of organizing, integrating, automating,
May 02, 2018 · D. Program Evaluation ͟The organization has provided a description of the framework for how each program will be evaluated. The framework should include all the elements below: ͟The evaluation methods are cost-effective for the organization ͟Quantitative and qualitative data is being collected (at Basics tier, data collection must have begun)
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