White paper - Performance Management diagnostics

WHITE PAPER
ENTERPRISE PERFORMANCE MANAGEMENT
DIAGNOSTICS
Hans Gillior
2014-06-03
“Every business is a digital business. You cannot be the
best in your industry by not being best at IT”

This White Paper has been produced by The Goodwind Company and focus on The
Enterprise Performance Management Diagnostics. The paper is describing the
background, workings and unique selling points of the Enterprise Performance
Management Diagnostics.
Note that the Diagnostics tool can be seen as a generic diagnostics tool to analyze
the workings of other IT or business processes such as Innovation, Cost
Management, Simplification etc.
For further reading on the topic on Enterprise Performance Management, please
read Gary Corkin’s “Performance Management: Integrating Strategy Execution,
Methodologies, Risk, and Analytics”.
For further questions or comments, please do not hesitate to contact The Goodwind
Company.
Hans Gillior
The Goodwind Company
hans@thegoodwindcompany.se
WHITE PAPER
EPM DIAGNOSTICS : INTRODUCTION
© Property of The Goodwind Company – All rights reserved

WHITE PAPER
EPM DIAGNOSTICS: BACKGROUND
¢  Many IT organization are relying on traditional governance
of IT (budgeting, planning and KPI administration) to
monitor and control the performance (undefined) of IT with
limited effects – little value is created!
¢  A changing business environment (new normal) driven by
digitalization resulting higher unpredictability, requires a
exact and agile governance of IT with focus on performance
(business value creation).
¢  Agile Software Development has created a demand for agile
IT governance to support the new ways of creating business
value in Software Development.
¢  Enterprise Performance Management is a extensive and
complex framework difficult to implement. A method to
analyze the current structure and create a roadmap is
needed.
Background

The Performance Management Cycle (plan–do–check–act) is an
iterative four-step management method used in business for the
control and continuous improvement of processes and products.
Definition
WHITE PAPER
EPM DIAGNOSTICS: PERFORMANCE MANAGEMENT CYCLE
Plan
Do
Check
Act
Plan phase:
Defining the strategy of the period
and means for execution
•  Strategic planning process
•  Guiding Principles
•  KPI and target setting process
Do phase:
Execution of strategy leveraging
resources
•  IT Service delivery
•  Process improvements
•  Resource optimization
Check phase:
Study the actual results and
compare against the expected
results to ascertain any differences.
•  Management reporting
•  Performance Analysis
•  Root cause analysis
•  Performance dialogues
Act phase:
Request corrective actions on
significant differences between
actual and planned results.
•  Adjusting goals and strategy
•  Communication
•  Reward and Celebrate
Business
Results
Business & IT
Knowledge
Resources
The Performance Management Cycle can be applied to any business
environment where a goal or strategy need to be achieved

The Performance Management Enablers represent the engine in
the Performance Management framework machinery. Each
enabler need to be addressed for each EPM activity.
Definition
Plan
Do
Check
Act
Conceptual design
Processes & Tools
Culture & Behavior
Information
Skills & Competence
Calendar
A design of how to carry out the activities in the
PM cycle (roles and responsibilities, guiding
principles, objectives, etc.)
Adequate processes and tools to secure efficient
and effective ways of working, and data quality.
Organizational culture and behavior (including
leadership) to drive optimization of performance
(HOW)
Efficient and effective exchange of information
between different activities in the Performance
Management cycle
The employees responsible for PM cycle
activities have excellent skills and competence
to manage activities
Adequate processes and tools to secure efficient
and effective ways of working, and data quality.
WHITE PAPER
EPM DIAGNOSTICS: PERFORMANCE MANAGEMENT ENABLERS

Enterprise Performance Management is about how to achieve of the
strategic objectives by planning, monitoring and ensuring change of
business systems or behavior in a (rapid changing) business
environment
Definition
The Enterprise Performance Management minimizes the time between the
identification of a trend or business change, and the decision to act upon it.
Property of The Goodwind Company - all rights reserved
WHITE PAPER
EPM DIAGNOSTICS: DEFINITION
Business Change
Forces
IT PM Mechanics Change Capacity Result
Plan
Do
Check
Act
Digitalization! Short cycles! Transform!
Involve
HR
Key components of Enterprise Performance Management

Hans Gillior • 25/02/2013
Rate of change vs. Agile IT Performance Management
The EPM Diagnostics tool
determines the IT organizations
position in the diagram (As-Is).
The diagnostics tool defines a
roadmap to achieve a new
position (To-Be) the diagram.
EPM Diagnostics
WHITE PAPER
EPM DIAGNOSTICS: PERFORMANCE MANAGEMENT DIAGRAM
Performance
Management
Mechanics
Change
Capacity
Dynamics of
Industry

Hans Gillior • 25/02/2013Property of The Goodwind Company - all rights reserved
7 •
Dynamics of Industry
Performance Management
Capabilities
Change Capabilities
Alignment
positioning
1
2
3
5
6
7
4
Level of dynamics
Industry
earthquake
Normal
dynamics
Heavy
dynamics
Extreme
dynamics
Weak
dynamics
Some
dynamics
No dynamics 1
2
3
5
6
7
4
PM capability scale
Excellent
capabilities
Satisfactory
capabilities
Good
capabilities
Very Good
capabilities
Almost
capabilities
Weak
capabilities
No
capabilities 1
2
3
5
6
7
4
Change capability scale
Excellent
capabilities
Satisfactory
capabilities
Good
capabilities
Very Good
capabilities
Almost
capabilities
Weak
capabilities
No
capabilities 1
2
3
5
6
7
4
Maturity scale
Excellent positioning
Satisfactory positioning
Good positioning
Very Good positioning
Unsatisfying positioning
Weak positioning
Dangerous positioning
Little impact High impact High impact
Plan
Do
Check
Act
Impact of
Trends
Maturity
Competition
IT
intensive
Leadership
Direction
Culture
Method
Industry dynamics Ability to deliver value Ability to change
Effects
WHITE PAPER
EPM DIAGNOSTICS: PERFORMANCE MANAGEMENT DIAGNOSTICS DASHBOARD
The EPM capability levels are a result (As-Is) of the EPM diagnostics analysis
(templates)

WHITE PAPER
EPM DIAGNOSTICS: DIAGNOSTICS – DYNAMICS OF IT (TEMPLATE)
1. How is the industry impacted by technological trends? (for example:
digitalization, mobile, cloud, big data)
2. How is the industry impacted by changed customer behavior? (for
example, new customer channels, social media, new customer demand)
3. How is the industry impacted by new regulations and economical
conditions (for example: BASEL 3, Euro crisis)
1. What is the general maturity of the industry? (for example: …)
2. What is general life time of a product or service provided to customers
in the industry? (High = < 6 months, Low > 5 years)
3. What is the ‘age of the IT organization’ in the industry?
(high= young (innovation); low = mature (structures and routines))
1. How dependent is the industry on information management and IT
technology?
2. What is the general purpose of IT in industry?
(Low = efficiency gains [internal] , High = value creation [external])
3. What level of customer interaction is through digital channels?
1. How protective are market barriers in the industry to keep new
competitors out? (for example: regulations, technology, others)
2. How much power does customers have to influence the industry? (for
example: pricing, products, brand)
3. Are there any emerging substitutes to the products or services
traditionally provides in industry?
Questions CommentsLow Scoring High
.
Trend
Impactof
trends
MaturityITintensityCompetition
The Dynamics of Industry is viewed from four perspectives: Impact of
Trends, Maturity of Industry, IT intensity, and Competition.

WHITE PAPER
EPM DIAGNOSTICS: DIAGNOSTICS – CHANGE CAPACITY (TEMPLATE)
The Dynamics of Industry is viewed from four perspectives: Leadership,
Method, Direction, Culture
1. The level of power of the guiding coalition to drive strategic change
2. Leaders’ ability to communicate and inspire the shared change vision
and strategy
3. Leaders’ ability to work for the best of the company and not for
personal gains.
1. The level of urgency in situation to drive change
2. Employees’ understanding and acceptance of the urgency in the
situation
3. How well are change obstacles identified and eliminated?
1. Level of obstacles in culture that hinders change (reactive forces)
2. To what level are successful employees (change agents / role models)
adopting the change rewarded
3. To what extent is performance a natural part of the culture?
1. To what level is a best-practice change management framework used
to achieve change effects?
2. How well are strategic change progress communicated?
3. To what extent are “low-handing fruit” identified and harvested?
Questions
LeadershipSituationCultureMethods
CommentsLow Scoring High Trend

WHITE PAPER
EPM DIAGNOSTICS: DIAGNOSTICS – PM MECHANICS (TEMPLATES)
: Excellent (= 1 green)
: Satisfactory (= 0,5 green)
: Weak (= 0 green)
Purpose Establish the objectives and processes necessary to deliver results in accordance with the expected output (the
target or goals). Plan on how to reach the objectives.
Process Documented Conceptual
design
Processes &
tools
Culture &
behavior
Information
platform
People, skills
and
competence
In planning
calendar
Environmental
scanning
(int./ext./dynamics)
Strategic
positioning &
scenario
Strategy & vision
formulation
Governance of IT
(RACI & Guiding
principles)
KPI setting process
(including target
setting)
Financial planning
Process Weighting
Planning Process 35%
Comments:
The planning process is considered the most
important process in Performance Management, and
it is then the foundation for Performance
Management is set. The process therefore receives
the highest weighting.
Grade No of
Greens
Score
7 32 - 35
6 27 - 32
5 22 – 26
4 17 - 22
3 12 - 17
2 6 - 12
1 0 - 6
Outcome Comments
Purpose Implement the plan, execute the process, value creation according to set objectives. Optimizing “Value of IT”.
: Weak (= 0 green)
Process Purpose and
goals of the
process
Conceptual
Design
Processes & tools Culture &
behavior
(leadership)
Information
platform
People, skills
and competence
PPM &
Investments
•  Business case
•  Portfolio
Management
•  Investment
steering
Service Management
•  Change Mgmt.
•  Incident Mgmt.
•  Problem Mgmt.
•  Capacity mgmt.
•  Service Catalogue
Strategic Initiatives
•  Lean
•  Innovation
•  Cost Reduction
•  Risk Mitigation
•  Reduce
Complexity
•  Simplification
Process Weighting
Do Process 10%
Comments:
The Do process consist of a number of proposed
enhancement processes that are voluntary. The
weighting of the process is therefore the lowest in the
Deming cycle. The process is important in the way
that this is where the value is produced and
enhanced.
Grade No of
Greens
Score
7 39 - 42
6 33 - 38
5 28 – 33
4 21 – 27
3 15 - 21
2 7 - 15
1 0 - 7
Outcome Comments
: Weak (= 0 green)
Process Sample
report
templates
Policies,
guidelines
and
frameworks
Processes &
tools
Culture &
behavior
(leadership)
Information
platform
People, skills
and
competence
In Feedback
Calendar
Service Quality &
Responsiveness
Customer (Business)
Value Reporting
Quality/Maturity &
Productivity
(Value Stream)
Reporting
Project and
Investment benefit
realization reports
Cost / Risk
management
Reporting
Employee &
Leadership
performance
Employee satisfaction
& motivation
Performance
dialogues (incl mgmt
reporting)
Process Weighting
Do Process 35%
Comments:
The Check process plays a pivotal role in
Performance Management to validate if the strategy
and goals are being fulfilled.
Outcome Comments
Grade No of
Greens
Score
7 50 – 56
6 44 – 49
5 35 – 43
4 28 – 35
3 20- 28
2 12 – 20
1 0 – 12
Purpose Study the actual results and compare against the expected results to ascertain any differences.
: Weak (= 0 green)
Process Samples or
templates
Policies,
guidelines and
frameworks
Processes &
tools
Culture &
behavior
(leadership)
Information
platform
People, skills
and competence
In Feedback
calendar
Performance
analysis including
root cause analysis
Strategy / Goal
adjustment process
Team development
Employee
development
Handling high/low
performers
Celebrate success
Process Weighting
Do Process 20%
Comments:
The Act process plays an important part in adjusting
the direction of the organization in a structured and
effective way.
Outcome CommentsGrade No of
Greens
Score
7 32 - 36
6 27 - 32
5 22 – 26
4 18 - 22
3 12 - 17
2 6 - 12
1 0 - 6
Purpose Request corrective actions on significant differences between actual and planned results. Analyze the differences to
determine their root causes. Determine where to apply changes that will include improvement of the process or product.

PLAN PROCESS: SCORECARD (EXAMPLE)
Process Policies,
guidelines and
frameworks
(including
governance)
Processes &
tools
Culture &
behavior
Information
platform
People, skills
and competence
In planning
calendar
Environmental
scanning
(int./ext./dynamics)
Strategic positioning
& scenario
Strategy & vision
formulation
Governance of IT
(Guiding principles
per governance
function)
KPI setting process
(including target
setting)
Financial planning
Grade No of
Greens
Score
7 32 - 36
6 27 - 32
5 22 – 26
4 17 - 22
3 12 - 17
2 6 - 12
1 0 - 6
Outcome Comments
Key issues:
•  Limited skills and competences in filed of Strategic planning
•  Immaturity in strategic planning process (conceptual level)
•  Need to establish functional planning calendar
•  Tools and processes are working fairly well
16p
WHITE PAPER
EPM DIAGNOSTICS: PM DIAGNOSTICS TEMPLATE (EXAMPLE)
EPM Enablers:
EPM Enablers
act the engine of
EPM machinery
Diagnostics
scoring:
The diagnostics
scores are based
on available of
artifacts and
subjective
evaluation.
EPM
Sub-Activities:
The sub-activities
included in the EPM
activity (Plan)
according to best-
practice.
Activity Scoring:
The accumulated
activity scoring
based on diagnostics
scores (RAG score)
EPM activity issues:
Description of strength
and weaknesses in EPM
activity. Issues to be
addressed.
RED: Ad-hoc approach, no artifacts
(obstacle for performance)
GREEN: Structured approach, great artifacts
(driver for performance)
AMBER: Work ongoing, some artifacts
(neutral performance)

12
•
Dynamics of Industry
Performance Management
Capabilities
Change Capabilities
Alignment
positioning
1
2
3
5
6
7
4
Industry
earthquake
Normal
dynamics
Heavy
dynamics
Extreme
dynamics
Weak
dynamics
Some
dynamics
No dynamics 1
2
3
5
6
7
4
Scale
Excellent
capabilities
Satisfactory
capabilities
Good
capabilities
Very Good
capabilities
Almost
capabilities
Weak
capabilities
No
capabilities 1
2
3
5
6
7
4
Scale
Excellent
capabilities
Satisfactory
capabilities
Good
capabilities
Very Good
capabilities
Almost
capabilities
Weak
capabilities
No
capabilities 1
2
3
5
6
7
4
Scale
Excellent
positioning
Satisfactor
y
positioning
Good
positioning
Very Good
positioning
Unsatisfyin
g
positioningWeak
positioning
Dangerous
positioning
Effects
1
2
3
5
4
Scale As-Is As-Is
1
2
3
1
2
3
As-Is
1
2
3
As-Is
Score
Impact of
trends
5,6
Maturity 4,0
Competition 4,7
IT Intensity 5,0
Trend
Score
Plan (35%) 3,0
Do (10%) 5,0
Check (35%) 5,0
Act (20%) 4,0
Total 3,5
Score
Leadership 4,0
Situation 5,0
Culture 3,6
Method 2,7
Total 3,8
WHITE PAPER
EPM DIAGNOSTICS: PM DIAGNOSTICS DASHBOARD (EXAMPLE)
EPM Components:
The three
components that
make up EPM.
EPM Component
scoring:
The scoring is
aggregated for each
component
(score 1-7).
EPM Component
dimension scoring:
The scoring of each
dimension of the
EPM element. EPM Score:
An aggregated score
combining the scores
of each EPM
component.
EPM Position:
The position in the
EPM diagram to
highlight the current
conditions and
relevant actions.

13
•
1 2 3 5 6 74
Level of Industry
Dynamics
1235674
LevelofPM&CM
Capabilities
Profitable Growth
Vicious Circle
Urgent Transition
Driving Change
Change Repellent
Prudent Transition
Urgent
Transformation
•  A situation with a high dynamics re-shaping the industry but with limited Performance Management
agility. The situation is quite urgent to invest in Performance Management to move into “Profitable
growth” section.
•  The action is to assess the situation carefully and make the right decisions to more in the right
directions.Property of The Goodwind Company - all rights reserved
WHITE PAPER
EPM DIAGNOSTICS: EPM DIAGRAM POSITIONING

Recommendations
•  All recommendations
will be documented in
separate templates and
in aggregated lists
•  All recommendation will
be prioritized based
according to IT and
business value
•  All recommendations
will be achievable in 4
weeks (support Agile
Business Development)
Conclusions
•  The conclusions will be
validated by reference group
before discussed in workshop.
•  The conclusions will be broken
down into PM enablers and
sub-tasks in PM cycle
•  A short conclusion on Industry
Dynamics and Change
Capacity
•  Workshop to discuss outcome
and set focus
Interviews & Workshops
•  All interviews and
workshop will include
business and IT
representatives
•  All interviews and
workshops will be
based on standardize
questionnaire
WHITE PAPER
EPM DIAGNOSTICS: HIGH LEVEL PROJECT PLAN

1
6
•  The purpose of the IT PM Diagnostics tool is to quickly assess the current
PM structure – and identify a prioritized list of improvements and “burning
platform” for change.
Purpose
Process
Initiation
Data
gathering &
analysis
Validation Prioritization Final report
Initiation:
•  Setting
expectations
•  Identifying
stakeholders
(20-30 managers)
•  Getting
infrastructure in-
place
3 weeks 2 weeks1 weeks 2 weeks
Data gathering &
analysis:
•  In-depth
interviews with
key stakeholders
(Business & IT)
•  First draft of
analysis
•  Steering Group
Meeting
Validation:
•  In-depth
interviews with
key stakeholders
(Business & IT)
•  Workshop to
discuss outcome
of analysis
Prioritization:
•  In-depth
interviews with
key stakeholders
(Business & IT)
•  Workshop to
prioritize the
identified
improvements
Final report:
•  Writing final
reporting
including
recommendation
•  Presentation to
key stakeholders
•  Steering Group
Meeting
•  The process aims to drive a constructive discussion to identify a strategic
positioning and action plan going forward (list of prioritized initiatives)
WHITE PAPER
EPM DIAGNOSTICS: DETAILED PROJECT PLAN

17
•
WHITE PAPER
EPM DIAGNOSTICS: UNIQUE SELLING POINT
¢  The EPM Diagnostics framework is the only
framework in the market that analyzes and
evaluates the IT Performance Management
Capabilities. How prepared IT is to deliver business
value in digital era.
¢  The EPM Diagnostics framework defines strengths
and weaknesses of the current set-up, and
highlights appropriate recommendations for
improving situation.
¢  The EPM Diagnostics utilizes SCRUM methodology
in managing recommendations and change
management activities – to secure optimal business
effect.
¢  The EPM Diagnostics framework is a generic tool
that can be used in other business circumstances.
USP

18
•
Hans Gillior
Founder & CEO
Email: hans@thegoodwindcompany.se
Telephone: +46 768 643778
Blog: hansgillior.wordpress.com
Web: www.thegoodwindcompany.se

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