There are 6 business value drivers identified by Jack Alexander in his book Performance Dashboards and Analysis for Value Creation that are under management’s control to influence:
1. Sales Growth
2. Relative Pricing Strength
3. Operating Effectiveness
4. Capital Management
5. Cost of Capital
6. Intangibles, Credibility, Future Expectations
These business value drivers can be influenced through a pro-active performance management approach. Improving the business performance can be achieved through a number of mechanisms both hard and soft in the organisation. Business processes are one of the tangible mechanisms that can easily be addressed to impact business performance. Pro-active process management impact most of the value drivers in a direct fashion. It can influence sales growth, drive and manage operating effectiveness, assist with capital management and manage intangibles.
Business Process Management is the one business methodology that can have a significant impact on business performance and value. I will address the concept of effective performance management through business process management in future posts.