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Ten Lessons from Business Intelligence and Performance Management Programs

Originally published January 25, 2012

Today’s business decision makers are under a lot of pressure. Economic uncertainty, unease among customers, and effective competition make recovery from poor decisions almost impossible. So, better business intelligence (BI) and performance management (PM) programs are essential. Business intelligence processes and tools enable the collection and analysis of PM information to improve business decisions and organizational agility. As much as the need exists for better decision making, the challenges of how and where to launch BI and PM initiatives is proving to be even a bigger hurdle. The following 10 lessons from implementing BI and PM programs will help avoid the hazards and failures.

Lesson 1
Align From the Business Side and Bottom-Up

Some organizations leave the direction and deployment of BI tools and PM capabilities to their IT departments, who often fail to involve business analysts in the early stages of development. This “build it and they will come” attitude fails to leverage the strengths of critical areas and discourages the data visibility, information analysis or sharing that is essential for effective change.

One recurring distinction between the more successful IT-led projects and the less successful efforts is whether a project is based on business-driven goals. When the IT department resists involving business sponsors or analysts in the early program discussions, the solution – however aligned to the architecture and eloquent – invariably does not deliver significant business value. So, get the business side involved upfront.

Similarly, initiatives that are driven from mandated “top-down” policies tend to create an equivalent resistance in workarounds, exceptions, or staff turnover that offset the intended benefits. The objective is to increase reporting accuracy,  give users a single source or multiple views of accurate performance data, and  enable users to perform more dynamic business analysis. Identifying these opportunities and building trust begins with quantifying the desired outcomes from the bottom-up.

So, begin from a foundation of business value. The IT department is unlikely to be able to quantify the potential business benefits of operational changes, and the business side may be unaware of resources or technology that could be deployed. Both sides must come together to build a convincing and holistic business case for BI and PM initiatives.

Lesson 2
Quantify Outcomes

There is no shortage of things to measure or monitor. When IT analysts get together to brainstorm on performance indicators, hundreds of operational measures and metrics can be identified. However, “a supermarket manager who works with food every day may know nothing about cooking an actual meal.” For effective and balanced measures, a business user’s touch is essential. Getting a balanced set of “critical ingredients to the table” in a form that is healthful and edible requires a cook. It’s okay to brainstorm some recommendations, but let the business community select what is appropriate.

So, identify business value metrics – but also work from a baseline. Improved efficiency is the most important benefit of BI and PM programs, but, measuring improvement requires a starting baseline. So, a PM program to establish current performance levels is generally needed before establishing a BI program to implement operational changes.

Lesson 3
“Gauge” Success

You wouldn’t attempt to drive blindfolded or drive ignoring road warning signs. Yet, too many organizations are run without the information necessary to steer properly. Avoiding gut-feel decisions and building process intelligence implies a measurement and reporting system exists. Dashboards of leading indicators can help organizations prevent disasters. And, these dashboards need to be “balanced” to prevent “gaming the system” (e.g., over emphasis placed on specific performance metrics causing incentives that create unintended behaviors and undesirable side effects such as distorted risk preferences, waste, unethical behavior, or erosion of motivation).

So, use dashboards to demonstrate value and promote values. High-level scorecards and management dashboards bring out critical issues so that different organizational roles aren’t talking past each other. Operational and management dashboards are the most important means of collaboration, reinforcement and sharing of information.

Communicating management priorities effectively is an important intended benefit of BI and PM deployments. Programs must enable managers to monitor controls, communicate priorities  and report progress. Develop dashboards both to improve management communication and to give operational workers a better way of collaborating on information.

Lesson 4
Prototype the Process and Apply Leverage Through Sponsors

The beginning and the conclusion of any successful program should be spent enlisting the support of executive sponsors. In the beginning, listening to them to get the right directions, and, in the end, reinforcing the messages and outcomes that indicate a job well done. Business executive sponsors provide leadership in cases where users resist replacing or modifying their traditional processes and tools.

A prototype system enables “quick hits” to be implemented early in the program. This establishes momentum and supports “buy-in”, but it also builds in a process of handling incremental changes. Demos to sponsors can make benefits clear, and prototypes help demonstrate capabilities using realistic data and existing resources. Both enable sponsors to explain the benefits initiates and to communicate desired changes before deployment. This partnership between project managers and sponsors can improve the potential for rapid return on the investment.

So, overcome challenges by leveraging executive sponsors. Business and IT executive sponsors must define project goals, timelines, metrics and work to overcome any lack of resources, which can be a significant barrier to successful deployment.

Lesson 5
Improve the Information Process – Not Just Access

Hoarding information does not make it (or you) more valuable. In today’s environment much of what is learned has a “half-life” of months or weeks. Getting the right data to the right people at the right time is still the mandate. Leaders must see beyond the urgent events to the important issues, and this capability requires access and connectivity to useful information sources. To make more and better decisions, organizations must improve information sharing.

So, identify key sources of information. Improving access is a critical, but access is only part of the battle. The need to improve the reporting process is where business intelligence and performance management demonstrate real value. Operational workers need reports that turn raw data into information in a context that facilitates sound decision making. In deployment planning, organizations must ensure that selecting appropriate sources, reporting methods, and media remain a key focus. A project that is able to demonstrate a thorough understand of the users’ reporting requirements has a much greater chance of success, and getting that understanding into operation quickly leverages the sources of information.

Lesson 6
Move Quickly to Deployment

Delay in deployment is one frequently reported dissatisfaction with BI and PM programs. Explaining what is causing a delay can be difficult, because there are many factors and technologies involved in a deployment, including back-end information management challenges concerning how to synchronize data, improve the quality and accuracy of information and its timely delivery to users.

So, minimize deployment delays by knowing users’ specific needs. It is important to make technology accessible to all relevant functions in operations. However, it is not always easy to translate enthusiasm for an outcome into specific steps to make it happen. Users aren’t often interested in the details; they want to see and create results. Especially when the prototype was so easy to demonstrate, the steps to getting it formally moved to production may seem like the IT department is dragging its feet. Communication of milestones, schedules, and progress is important to keep the momentum going.

Also, building in the ability to change may be more beneficial than the selected technology. As users engage, the changes to requirements may be significant. The ability to adapt and deploy quickly builds the capability to change into the process.

Lesson 7
Consolidate Best Practices

A centralized approach to business intelligence and performance management is more common with larger organizations, but larger organizations also have more difficulty overcoming resistance to centralization. BI best practices and common PM reporting processes should be encouraged through an enterprise performance board or a performance management office. These practices will reduce redundancy in the organization’s operational reporting and data access capability. They can also save costs in data consolidation or transformation and in metadata management. However, cost-saving alone doesn’t justify a centralized approach. The driving factor for BI and PM programs should be to deliver high-quality information to workers who leverage it (through decision makers) to create or gain important business value.

So, consider centralizing common practices. Do your users prefer centralized processes over departmental approaches? It’s easy to justify centralization. Operational programs usually require systems to integrate and deliver data from more sources and update it with far greater frequency than most departmental systems require. Too often, business and departmental users integrate data through complicated custom code using point-to-point links between users and sources. These point integrations are often poorly documented and are usually inflexible and unable to respond quickly to changes or other users’ requests, leading to demands for IT support. Centralized deployment can be a step toward a more versatile infrastructure for data access and integration.

However, not all operational workers will have the same BI and PM reporting requirements, so avoid turning a centralized approach into “one size fits all.”  A centralized platform will support the strategic deployment of dashboards and BI metrics as well as PM reporting options. Then additional sources, more integrated data or tailored processes and practices can be added.

Lesson 8
Integrate the Data

Integrating data from multiple sources has always been the BI challenge. Plans must anticipate increases in the number of data sources. Therefore, organizations must include in deployment plans an appropriate information management strategy to support access to multiple sources of data, common terminology, various data types, and media (e.g., relational data; spreadsheets, and flat files).

So, provide access to multiple sources of data. The effort to improve service is a leading business objective for BI and PM programs, and providing more and more sources is a critical capability for improved service. Operational workers frequently need access to at least five sources and often need 10 or more sources. Gaining a single view of all this information is a challenge in timing and data integration. For example, the merging of some federal government agencies has uncovered BI and PM systems that use different basic formulae to calculate full-time equivalents. So, analyzing personnel resources and reporting across functional units requires translation to common formulae.
 
Keep in mind that giving operational workers wider access to data could have an impact on performance. And wherever data is located, it must be accurate and of high quality. Creating metrics to assess the quality of the data and attaching this metadata to the data before it is made available to operational workers will support confidence in its use. Be prepared to update data delivered to operational workers at least monthly, but probably more frequently. And finally, be prepared to re-align metrics and performance metrics, because as organizations improve, the kinds of decisions that are made will also mature.

Lesson 9
Re-align Metrics to Organizational Strategy

It’s easy to become so enamored with the new technology that the original uses for the data are ignored. It is important to periodically re-align and reinvigorate the organization’s vision, strategy, processes, and metrics. As the process matures, so will the users’ capability and the needs of the decision makers.

So, support KPIs that align data sources and decisions. Performance management is the process of aligning people, processes, information and technology with a common set of strategic goals and objectives. Setting specific, challenging goals can powerfully drive behavior and boost performance. After the bottom-up deployment, project analysts must meet with executive sponsors to make sure they understand the needed operational data. This knowledge will validate the sources to be accessed and how often the data has to be updated.
 
As organizations mature, the kinds of questions that decision makers need to answer will change. Data or reports that aren’t being used should be revised or replaced. For various reasons, users may just file operational reports for historical reference rather than use them for decisions. Maintaining such manual reference libraries may not be an effective use of business resources and should be re-assessed.

Lesson 10
Enable the Workforce

A primary goal for BI and PM initiatives is more organizational agility (e.g., visibility, flexibility, accountability) and this is done by enabling the workforce (e.g., training, coordination of roles and responsibilities).

Canned reports may satisfy operational workers initially, but there is a need for self-service capabilities that let them design new reports and perform ad hoc analysis. Organizations should develop a plan for adding self-service features. Applying a narrow or reactive approach that overlooks the potential of general querying and information analysis or fails to monitor the impact of overall performance will quickly turn a positive initiative into disappointment.

So, support advanced and emerging technology. Many opportunities are available to apply technology to improve performance. (e.g., web-based surveys, social networking, teleworking, 360-degree evaluations, OLAP cubes, extreme programming, online training, software as a service. ) An enabled workforce is critical for an agile organization.

Summary

As BI information and PM best practices are shared and evolved, these programs will have a significant potential for improving and merging IT department and business areas. These lessons should help organizations avoid costly errors, restarts, and failed programs so that, instead of struggling with information collection and distribution, they can focus on value creation.

  • Donn DiNunno, PhDDonn DiNunno, PhD
    Donn is an expert in performance metrics and process definition for organizational process and product improvement with more than 36 years in software engineering, information analysis and quality management. Donn’s areas of specialization include: IT metrics and measurement, OMB Exhibit 300s, quality and risk management, performance and data analysis, IT organizational assessments, process modeling and documentation, systems re-engineering and IT portfolio management. He may be contacted by email at donn.dinunno@em-i.com.
 

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Posted August 5, 2012 by luke.mua@mps.gov.sb

The article is really useful and helpful as the lessons therein are relevant to my job.

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