How Analytics Can Role Over To Improve Performance
If Susan had access to her key metrics through a role-based analytics application, her production analysis process would likely compress from days to minutes. She needs to be able to see her key metrics on demand so that she can adjust her manufacturing environment in response to changes in the business environment. A well-designed analytics solution specific to her production role could automate data integration among the various source systems she needs to access and apply predefined models, algorithms, and calculations that would analyze her data in an instant. The end result would be a huge time savings for Susan and the ability to respond better to any problems that may arise. Equally important, since the analysis she would use to make decisions would rely on more consistent data sources and calculations -- and she would know she was using the same data and calculations as others in the company -- Susan would be able to approach meetings, reports, and performance comparisons between plants with more confidence than she can now.
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- BPM 101: Selecting a Business Performance Management Vendor" -- new white paper from BPM Partners
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To be effective, role-based analytics should be delivered in a manner that enables each person to view, analyze, and monitor performance metrics from multiple business angles and various levels of detail. Data delivery can take the form of dashboards, reports, e-mail alerts, or spreadsheets. Regardless of the format, displays should be prebuilt and should include charts, graphs, maps, tables, gauges, lists -- whatever presentation options will make the data most accessible to the end users. Each area of analysis should also provide the ability to drill down for more focused exploration.
For another example of role-specific analytics, consider the leftmost dashboard in exhibit 1. It was built for Mike Tuttle, a sales executive in a manufacturing company. The left half of the dashboard is devoted to Mike's financial performance. The top left quadrant shows Mike his targeted and budgeted sales by region; the bottom left quadrant shows his key financial metrics and their variance from plan. In our screen shot, Mike has exceeded his budget for head count; this variance is highlighted in red, as is net income, which the staffing-budget overrun affects. The dashboard enables Mike to click on these red metrics to see details behind the problem.
This type of functionality can be found in many of today's performance management software products. What's exciting about the concept of role-based analytics is the capability to incorporate all the metrics, both financial and operational, that a nonfinance manager would need to keep tabs on. In our example, the top right quadrant of Mike's dashboard shows the company's product mix by drawing data from the company's ERP system. The bottom right quadrant shows on-time delivery numbers based on data pulled from a CRM database. Including analytics related to all the metrics nonfinance managers need to track to effectively run their area of the business helps performance management software become a core tool for managers who might otherwise consider business performance management (BPM) a finance system.
Whither Goes Role-Based Analysis?
The subject of analytics often arises when companies embark on a BPM initiative. Some companies have embraced the concept as part of their culture, carefully monitoring and measuring key data to improve business results. Other companies still see analytics as a luxury, something that is nice to have for organizations with the time and money to implement and support it. Companies with the former attitude may find that role-based analytics makes their performance management initiatives more efficient and effective, providing functions across the organization with the right data in the context of the specific business issues they are addressing. Companies with the latter attitude may see a reason to embrace analytics simply to relieve IT burdens and get business managers the key performance indicator (KPI) data they need faster.
Whether you think "analytics" is a buzzword or a promising path to achieving an advantage over your competitors, you should pay attention to the ways in which analytics' contribution to BPM is changing. Recent advancements in performance analytics applications have emphasized simplicity so that the average businessperson can use them effectively without needing an advanced degree in statistics. The challenge for vendors has been providing this ease of use while delving deep enough into the data to answer the questions business users have day in and day out, questions such as: How many work orders are complete? How many work orders are on hold? How much backlog do we have? How often are we delivering products on time? A well-thought-out analytics solution can provide decision-makers with the data to answer these questions, gathered from all the appropriate source systems; sort through the data and ensure its accuracy; apply the right mathematical formulas; and then deliver it to decision-makers in the form of ready-to-consume analysis. Exhibit 2 provides examples of different functions within an organization and the types of information each might require of a BPM analytics application.
As consolidation continues in the performance management software market, some vendors may begin to amass several role-based analytics applications. However, there currently is no single solution from a single vendor that will meet the entire organization's needs. Role-based analytics applications are generally delivered by function, from vendors with varying degrees of expertise in specific functions and industries. These vendors can provide a pool of metrics based on their past experience; the solutions may be programmed to calculate 100 or more KPIs for a given functional role. For that reason, it is generally more economical to purchase role-based analytics than to build a solution in-house.
Implementing role-based analytics should not require ripping out the database technologies where a company already stores the information it wants to analyze. Instead, analytics software should extend a company's existing applications cost-effectively. It should tap into the organization's various data sources and easily move the appropriate information through to end users.
But implementing role-based analytics will require the company to choose the metrics and the delivery format that are most relevant to each user's (or role's) needs. The complexity of customizing such a solution depends on many variables, including the number of roles, the number of users in each role, the number of data sources being accessed, and so on. As with any BPM initiative, the metrics used should be monitored over time, and adjustments should be made to ensure that employees in each role stay aligned with corporate strategy and continue to receive the information they need.
The next phase of BPM will involve delivering role-based analytics within the context of vertical industries. This evolution will take into account industry-specific governance and compliance requirements, such as HIPAA for health care or FDA regulations for consumer packaged goods. It will also provide prebuilt KPIs, such as customer discretionary spend for the gaming and hospitality industries and customer churn for telecommunications. Applying such industry-specific issues to software that provides very targeted role-specific performance data will bring managers throughout the organization the ultimate analysis capabilities and will bring performance management full circle.
Christina McKeon is director of product marketing for performance management at Infor, where she is responsible for Infor's global performance management strategy.
