By Jeff Walter
November 20, 2008
In a corporate organization many activities contribute to performance and meeting business objectives. The organization must track these activities, discover and communicate problems, and coordinate solutions. How well can an organization evaluate how its operations are contributing to business results and meeting targeted goals?
According to IDC (www.idc.com) research, performance management, where organizations establish strategic goals and specify operational metrics to measure progress, has gained momentum across the public and private sectors. Providing relevant feedback to decision makers at near real time (or right time) can improve the quality of these decisions. Building a "sense and respond" capability, according to IDC research, is crucial for making continued improvement in business performance and when making critical decisions that dramatically impact an organization.
IDC also found a significant number of companies are giving high priority to IT investments to support performance management initiatives. Many of these investments are in the area of business intelligence (BI), data-driven systems that provide analysis, reporting, and management tools. One of these tools, the BI dashboard, visually presents data for analysis.
An example of a BI dashboard is the electoral map on www.yahoo.com (http://news.yahoo.com/election/2008/dashboard;_ylt=AjNVb7wD8D.c5xT0xtLAVeBsnwcF). The map provides a color-coded rendering of the U.S. according to the winner in each state. By selecting a state, the user can view specific electoral information on vote tallies and percentage of precincts reporting.
During the election, the information was updated in real-time. A user could easily access the information and evaluate the incoming results and make an informed judgment about how the election might progress over the next few hours. By selecting "Create Your Own Scenario," the user can even assign states to different candidates to see who the winner would be according to different electoral combinations.
Suppose a decision-maker was interested in the demographics and performance of different business locations to help determine how to assign corporate resources to these locations. A dashboard similar to the Yahoo! electoral map could provide an interface that allowed the decision-maker to quickly view this information. This business application might even have its own "Create Your Own Scenario" function that would allow the decision-maker to try out different allocations of field staff, marketing promotions, and training resources. The dashboard could provide projected performance changes for each business location and for the business as a whole, depending on the resource allocations. After trying out the different possible combinations, the decision-maker might even have a performance improvement plan in hand that could be saved or printed.
In fact, General Motors uses a similar web-based business intelligence application for service and parts operations at its North American dealerships. Their application does not include an interactive map, but is does allow both corporate and dealership staff to access performance data and apply what if scenarios to different programs and promotions that can be implemented at the dealership level.
For example, if return visits for a vehicle repair are high, the GM field manager may recommend that a dealer's service technicians attend a training class. The field manager can select the training activity in the GM business intelligence application, which can then project the performance improvement the dealer can anticipate. After recommending additional activities that can positively impact return visits and other low performing metrics, the dealer will have a complete performance improvement plan.
Organizations like GM face many challenges when evaluating and optimizing the performance of their operations. The power of business intelligence is its ability to capture data from different business systems and unify them into a dashboard that supports making informed decisions based on a comprehensive and complete picture. In this challenging economic landscape, tough decisions need to be validated by data, not intuition.
Jeff Walter is president and a founding principal of Latitude, a senior technology consultancy. Walter brings over 15 years of experience in leveraging information technology to solve strategic business problems for organizations.