OPM ® : A SYSTEM FOR ORGANISATIONAL PERFORMANCE MEASUREMENT

The CSIRO Organisational Performance Measurement (OPM®) system is based on the principles of Alignment, Process Thinking and Practicability. The system starts at the strategic level to determine external measures driven by stakeholder perspectives of the organisation’s performance. The system then works through the organisation to align organisational and operational measures with this focus. A set of Key Performance Indicators operates at the tactical level enabling the prediction and management of organisational performance. At the operational level, measures are utilised for monitoring, control and improvement of the way in which the organisation creates and delivers its products and services. Introduction CSIRO Australia is currently implementing its OPM® system for organisational performance measurement. The system has been developed from empirical case study based research in both large enterprises and SMEs (small and medium enterprises). This research investigated ways of helping organisations work out what performance measures they need in place to monitor all aspects of organisational performance. The purpose of this paper is to explain the basis of OPM® and to describe in broad terms the way it is being implemented in Australian enterprises to provide them with effective organisational performance measurement systems. We first provide the findings of the research. We then discuss the principles underlying OPM®, and the overall system for measurement that serves to unify and focus the work of the enterprise on its strategic goals. Next, we address the practical issue of how to deploy OPM® effectively throughout an organisation. Finally, we describe briefly how OPM® is being made available to the wider community. The reader is referred to Dransfield et al. (1999) for a more extensive discussion of the theory underlying OPM® and the role of Statistics and statisticians in its effective deployment. 1 CMIS, Locked Bag 17, North Ryde NSW 1670 AUSTRALIA. Presented at “Performance Measurement – Past, Present and Future”, University of Cambridge, 19-21 July 2000 Performance Measurement Research CSIRO has worked with large Australian enterprises for many years to improve their approaches to performance measurement. A federally-funded project initiated in 1995 extended this work to incorporate SMEs. This research was undertaken with a variety of enterprises representing different sizes (from small to large) and industries (public, private and the not-for-profit sectors). The objective of the first phase of this initiative was to ascertain the status of performance measurement systems. For a report on this work, see Barnes et al (1998). The common themes identified in this research were: • a lack of alignment between strategic intents of the enterprise and what is actually measured and reported • information that is limited in scope – usually just focussed on financial performance • information that does not support measurement and evaluation across the range of management levels and roles • information that is largely operational • a lack of data and information to evaluate performance at the tactical level: typically, only aggregated operational data are used to assess organisational performance • scant attention to consistency of measurement (e.g. through the use of operational definitions) • lack of processes to ensure that relevant data are available in a timely fashion • approaches to measurement that reflect little or no understanding of variation • approaches to measurement that reflect little or no understanding of the management and improvement of processes • the use of presentation formats that do not assist the appropriate analysis and interpretation of the data (e.g. limited use of appropriate graphical methods for displaying data and information) The OPM system, comprising a framework and an assessment/implementation methodology, has been developed to assist organisations to address the above deficiencies in their performance measurement systems. The Underlying Principles of OPM The OPM® approach to measuring organisational performance is based on three fundamental principles, relating to Alignment, Process Thinking, and Practicability.