Performance Prism is a tool that can be used by organizations to assess and improve their performance. It can be used in software development, strategy, financial management, human resources, accounting, operations management, and project management.
This tool was first developed by Michael Porter and Robert Kaplan in the early 1990s. performance prism provides a framework for assessing an organization's performance across multiple dimensions.
It has since been used by organizations of all sizes and in all industries to improve their performance.
What is Performance Prism?
Performance Prism is a framework for developing multi-dimensional performance measurement systems. It has five perspectives: stakeholders' needs, strategy, process, capabilities and resources, and our needs from stakeholders. Performance Prism helps organizations understand what their stakeholders want and need from them, as well as how to achieve those goals. The tool also assists in identifying and fixing problems in applications to improve their performance by utilizing five key components: load testing, application profiling, application performance monitoring, application delivery management, and application governance.
What are the components of Performance Prism?
1. Financial Perspective: This component looks at financial performance, focusing on how to maximize shareholder value.
The financial perspective of Performance Prism includes profit, return, equity share, sales, customer satisfaction, and more. It is an element in the framework that takes into account the different interests of different stakeholders within an organization. This perspective helps to measure system performance and identify areas where improvement is needed in order to develop strategies for doing so.
2. Customer Perspective: This component looks at how customers perceive the company and its products or services.
The customer perspective in Performance Prism involves understanding what customers want and need from a company, how best to fulfill those needs, and how to improve processes to support strategy execution. It includes taking into account the stakeholders’ views on satisfaction, strategies, processes, skills, and investors. The Performance Prism framework provides a detailed derivation of performance figures from a customer-centric approach which allows for accurate performance assessment as well as identifying potential risks and opportunities.
3. Internal Process Perspective: This component looks at the internal processes of the company, and how they can be improved to better serve customers and increase efficiency.
The Internal Process Perspective (IPP) is an evaluation model that assesses the contribution of all stakeholders-internal and external- to a company's success. The PP model utilizes critical figures to calculate success metrics for each stakeholder and sets up a failure scenario in order to identify potential risks. This perspective is important because it allows businesses to understand the importance of their internal processes in order to comply with regulatory requirements, keep employees content, and optimize profits.
4. Learning & Growth Perspective: This component looks at how to develop and retain employees, and how to ensure their knowledge and skills are up-to-date.
Employee development and retention are important in the context of Performance Prism because they help organizations fulfill stakeholders' requirements, ensure that processes remain efficient and effective, and return resources to stakeholders. Additionally, employee development and retention can help organizations meet their strategic objectives by providing them with the necessary tools for success. Furthermore, when employees are effectively developed and retained, it allows for better management of resources which helps improve organizational performance.
5. Innovation & Improvement Perspective: This component looks at how the company can use innovation and improvement to better serve customers and increase profitability.
Innovation and improvement are important to the Performance Prism model because it allows for a holistic view of stakeholders' contributions, which encourages customers, investors, and employees to all seek to benefit from the organization. The Performance Prism also ensures that companies remain compliant with regulatory requirements. By giving each stakeholder an equal voice in how their needs are met, the Performance Prism will help organizations identify new opportunities for growth and sustainability.