Although Performance Management (PM) and Business Intelligence (BI) can work separately, almost all leading organisations combine these two together to provide the best business results. PM uses the power from BI to get the data and information needed to make decisions, and PM adds context and guide BI in a certain direction benefiting the organisation. In previous posts, we discussed about how to optimise BI for SMEs as well as the way to operate BI platform in the right way. To explore more into how to enhance BI in your PM processes for greater results, we will look at some findings and recommendations to solve this problem.
Despite major investments in technology, many companies are still relying on spreadsheets, presentations and emails as the main BI tools for information analysis, although these tools are not designed to optimise organisational performance. As organisations grow bigger in size, the number of daily data that one must handle every day will increase dramatically, henceforth spreadsheets cannot help data analyst shorten the working time; they need something more flexible and informative. For example, BI tools such as metrics and dashboard enable organisations to provide better information for decision making and feedback, enhance communication and collaboration within the company, thus improve the overall performance.
Fortunately, according to Ventana’s research, the demand for both PM and BI is strong. Organisations’ goals when deploying BI tools are to provide different tools to access data (57% of participants), to enable easy analytics application to the data (61%), and to communicate and collaborate the analysis results throughout the company (55%). However, the use of BI and PM of these organisations only reaches moderate maturity level due to limited budget and lack of confidence in applying BI..In consequence to these findings , here are the first 5 among 10 steps to help proceed to 21st century business intelligence and performance management.
1. Assess your organisation maturity in BI and PM
A recent survey from Ventana in 2013 revealed that only 15% organisations reached the “innovative” level of 4 functional categories of maturity (Process, People, Information and Technology) and the rates between each category are also fluctuated. Specifically, 11% companies are at innovative level as for the Information component while 22% organisations reach this number in the People category. Information maturity is only achieved if the data is easily accessed and communicated throughout the organisation. Companies are recommended to examine their capacities in each functional category and research from the best practices to learn how to gain organisational maturity.
2. Consider the effectiveness of your current BI tools and applications
A large number of organisations has doubt in the use of BI in PM (only 12% claim that they are completely confident of their BI technology; and 9% uses the tools and applications for performance management process). About one-third of participants is confident about either BI and PM (35% and 36% respectively), and executives have stronger confidence in both cases than managers and analysts, surprisingly, since the latters should be the ones who have more experiences in using BI and PM tools. Hence, organisations should examine the effectiveness of current BI applications and identify which tools to be replaced for easier use.
3. Reduce the number of BI tools and the use of spreadsheets
Spreadsheets can be extremely effective to analyse data and provide what-if analysis based on various functional tools such as macros, pivot tables, filters, etc. However, when the demand for data analytics communication and collaboration within the company increase, spreadsheets can no longer satisfy the needs. Users encounter errors and data conflicts easily and such errors can mostly be fixed after communicating the spreadsheets among colleagues, which is time-consuming and costly. The way to solve this problem is to reduce the number of BI tools that you have found ineffective in step 2 and standardise the tools to a complete and neat system.
4. Compare the BI capabilities you have with those you want
Almost all organisations have deployed or are deploying basic BI capabilities, such as accessing data from spreadsheets, generating reports from data or querying sources for specific data. However, only a few actually extend to advance BI capabilities with more effective use of BI than others, such as collaborating on data and metrics, conducting what-if analysis and applying analytics to data, etc. Therefore, before deploying any advance BI capabilities, companies should compare what it has to what it wants and determine the exact products that can provide them those functions, to avoid any unexpected costs could occur.
5. Determine current products’ ability to handle performance management
The most important and significant goal in performance management is to transform information to actions and align them to organisation goals and strategy for effective improvement. The use of BI tools can help you just that. However, there are doubts about the effectiveness of BI tools in performance management since they received lower results than expected. The trick here is to look at the adequacy of the tools and systems used to manage business performance and determine what tools are more cost-effective and productive than others.
In the next blog entry, we will discuss the remaining 5 steps to combine Business intelligence to performance management in the most effective way.
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