Performance ● Governance ● Compliance (PGC)

What is Closed-Loop?

Roughly speaking… a “closed-loop” system is a process that converts or transforms inputs into outputs while ensuring that controls are in place to regulate or govern that process. The goal of any closed-loop system is to ensure that the control information is fed quickly to that part of the process that needs to be brought under control or alerted. These “feedback loops” must be timely enough to stop the process to fix a process flaw or boost the quality of the process outputs or deliverables that are produced by that process.

This is very similar to the cybernetic principle, i.e., everyone understands the process of setting the room temperature (standard) for the heating system (process), which will constantly check (compare) ambient room temperature (control information) and will signal (act) the heating system to provide more heat.

The closed-loop performance management model allows best-in-class enterprises to focus on the following critical areas that are frequently given little attention by competitors with lower performance:

• Explicit linkage of plans to specific cross-functional operational objectives and metrics.

• Root cause performance analysis designed to drive better decision-making in the future.

• Systematically determining and propagating best assumptions, analysis, and decisions.

• Targeting performance management around very specific high profit and/or strategically significant potential market segments.

 

Performance Management Imperative

What is Closed-Loop?

Significant Business Value

XBRL