The potholes of performance management technology: a new road and its obstacles.

• Author: Smith, Mark A.
• Position: Cover story

Constituents, elected officials, and executive mangers have become accustomed to real-time data retrieval and analysis in their everyday lives. Podcasts, CNN, online search engines, and instant messaging have created an expectation that relevant information should be easily, if not instantly, accessible. People wonder why government cannot provide the same access to information, especially when there is a need for that access, driven by factors such as Governmental Accounting Standards Board pronouncements, political issues, or a simple desire to make management decisions based on meaningful performance data. This phenomenon will only gain momentum, so public managers would be wise to start addressing demand now by considering technology strategies to complement their performance management strategies. A performance management technology strategy is more successful and less expensive when implemented in a gradual, incremental fashion, so it is important to get started before demand reaches a crescendo.

A TRAIL OF FALSE HOPES

Some public managers (and vendors) have held out hopes that technologies like enterprise resource planning (ERP) (1) systems would create a single source of data and information. While these systems have improved the state of government data, the universe of information required for performance management is simply too expansive to be captured by any single system, given the array of services and programs under the purview of local governments. Technologies have emerged to automate government operations for these services, just as ERP did for administrative services, and the proliferation of systems adds a new challenge--a propagation of electronic data that must be gathered, sorted, and commingled (often with financial and human resources data) to create useful performance information, in addition to the data created by tools like the Internet and spreadsheets maintained apart from systems of record that may have implications for performance management. Unfortunately, technology has thus far fallen short of its promise to turn these prodigious amounts of data into prodigious amounts of useful information. Despite the unprecedented levels of data being captured and the unparalleled access decision makers, analysts, and many everyday users have to it, the principle complaint remains: I cannot seem to get at the data the way I want to report it, and I cannot combine it with other data sources in the same report without the help of an information technology expert, fiat all.

A NEW ROAD AHEAD

This conundrum is not unique to public employers--the private sector has also been trying to derive insights and competitive advantages from vast stores of operational data. Recently, advancing technology has coincided with a mandate from top management to use data to drive business decision making. In his new book, Competing on Analytics: The New Science of Winning, (2) noted business and technology researcher Thomas Davenport describes how a confluence of technology and management leadership has led to impressive results at diverse organizations. Davenport found that 65 percent of firms he defined as "high performers" (in terms of profit, shareholder return, and revenue growth relative to their industry) made extensive use of performance management technology, compared with 23 percent of low-performing companies. This research shows that performance management technology has finally arrived and that the potential is real.

There is no reason the public sector cannot replicate these successes. As Davenport points out, the technology, while far from "plug-and-play," is no longer the primary barrier. Rather, what is paramount is leadership commitment to...