Risk based Balanced Scorecard Performance Management
Typically performance management is done on spreadsheet, where the information needed to generate reports is scattered throughout multiple silos and levels, and more importantly is unable to show the impact of emerging risks on goals that could blind side the strategic plans of the organization. LogicManager enables organizations to identify risks and commitments; assess them based upon likelihood, impact and assurance; evaluate whether action is needed; devise mitigation or business building activities if needed, specify and record measurements to track effectiveness, and finally formalize the connection between all of these activities. Connecting the measurements to the risk mitigation activities and business initiative data and then back to the underlying risk and commitments, will allow organizations to detect increased threat levels and identify new emerging risks before they materialize and bring your business metrics out of tolerance.
Here are some examples of what LogicManager’s Solution can do for you:
Manage Relationships – Much of the necessary information exists in organizations today; the missing piece is formalizing critical connections between risks, mitigation activities, and measures. With LogicManager, performance management is more than just tracking business metrics. It’s about knowing what to measure, being alerted when that measure is out of tolerance, and knowing who needs to be involved across the organization to take corrective action. You must weigh the potential reward against the risk in all activities and decision making to reach your goals. LogicManager’s ERM software includes robust balanced scorecard capabilities that align business activities to the strategy of the organization through risk management.
Gain efficiency – Real-time trending of measures on an ongoing basis will help direct management’s attention to problem (out of tolerance) conditions. The number of business measures within organizations is typically growing. Measures are often added on a reaction basis to loss events that have already occurred. Wouldn't it be valuable to be able to focus on forward looking measures? In most organizations, these preventative, proactive measures are indistinguishable when grouped with reactive measures, because the metrics do not formally tie back to any commitments or risks. This means resources are being spent on historical and non-priority activities. Once connections are made between performance goals, risks and mitigation activities, organizations have a standardized approach to allow for the rational elimination of measures that have low priority or have no connections to risks or business initiatives. This will allow for more effective use of scarce resources in maintaining and analyzing measures.
Set priorities – LogicManager enables organizations to use risk to see forward looking trends, so that organizations can prioritize business metrics based on changing threat levels to goal achievement. Most organizations have no way of knowing how and if changes will affect their risk metrics. Risk Assessments and linking risks to activities, allows organizations to start prioritizing what activities need to be monitored. Through regular quarterly, or even annual, risk assessments, organizations can detect increased threat levels and identify new emerging risks before they materialize and bring your business metrics out of tolerance.
1. Balanced Scorecard
- Key Performance Indicator(KPI) Library – a comprehensive pre-built register of key performance indicators to identify business goals and evaluate action plans.
- Evaluation Criteria – preloaded standardized evaluation criteria to quantify opportunities and prioritize resources.
- Validation – automated completeness tests ensure goals are managed by policies, procedures, controls and measured.
- Measures – collect and aggregate related business metrics from across multiple-business areas.
- Prioritization – prioritize business metrics based on the importance of the risks and goals they monitor.
- Gap Analysis – understand gaps where key risks and goals are not monitored by business metrics.
- Trend Analysis – analyze trends over time rolled-up across silos and levels. Identify root causes of change with a simple drill down into the responsible functions and processes across the enterprise.
- Measures – align all business process goals and objectives with actionable and measurable activities.
- Linkage – prioritize business metrics based on the importance of the goals and activities they monitor.
- Monitor Goal Achievement – connect business metrics to the operational activities and the goals they monitor. Get clarity on what action needs to be taken to ensure operations remain on track.
- Resource Allocation – use standardized evaluation criteria to compare initiatives like cost–cutting, customer satisfaction and new product introductions on an apples–to–apples basis across business silos to better allocate resources.
- Variances – identify where key activities across business silos and levels are moving outside of high/low limits or thresholds.
- Budgeting – status reports that link resource allocations to goal achievement for budget committees and operational reviews.
- Customer Complaints– captures, escalates and reports on customer complaints with configurable fields to ensure collection of necessary data.
- Status– organize and understand nature and source of complaints.
- Response – engage necessary resources to analyze and develop responses.
- Investigations – track a threaded discussion for investigations and assignment of responsibilities through to resolution.
- Issues – manage corrective actions for internal and external audit findings.
- Pre–configured Dashboards & Reports – dashboards and reports track activities for at the department level and roll-up to enterprise corporate goals.
- Status – track status of operational activity and upcoming changes and current status.
View our video white paper One Shared ERM Infrastructure on how to use a common ERM software-as-a-service platform to more effectively achieve corporate strategic objectives.