Business intelligence (BI) and business performance management (BPM) are inextricably linked, with BI acting as a critical power source for the performance management engine. Companies that adopt BPM and BI initiatives today expect substantial benefits, such as improved visibility into corporate data for business planning and decision-making.

Unfortunately, they’re often disappointed. The Ness Technologies Market Pulse Study on BI reveals that results often lag expected outcomes. According to our research, the biggest barriers are not — as might be expected — technical ones. Rather, what’s holding companies back is their failure to align their initiatives with their overarching corporate strategy. Other major obstacles include inadequate data governance, lack of partnership between business and IT, resistance to change, lack of executive sponsorship, and poor communication.

In this article, we offer three examples of companies that have run up against some typical performance management obstacles, and tackled them with varying degrees of success. While the potential problems that BPM initiatives may face are many, and every company is different, our main focus here is on the challenge of establishing strong data governance, which ensures that companies measure the right key performance indicators (KPIs) and gather the right data.

Killed by Off-Kilter KPIs

Incorrect performance measurement can lead to undesirable behavior and incorrect business decisions. Take, for example, a telecommunications company (mainly cellular and Internet) that focused its corporate strategy on raising value for its current customers. Despite this focus, the IT group, which was leading the performance management initiative, implemented KPIs which measured the number of new customers (misalignment with strategy) and the number of times that sales representatives contacted customers (wrong KPI). What’s more, the calculation for the number of new customers failed to subtract the number of churning/silent customers (wrong definition).

Although these metrics were easy for the IT group to gather, calculate, and qualify, they were wrong for the business. And they produced negative results. For example, sales staff would contact customers too many times with new offers, and they ended up driving customers away.

The Path to Least Resistance

If that’s an example of how to do it wrong, our next case — a large defense company — is the exact opposite. This organization, just like the telecom, struggled to find the right KPIs when it tried to implement a comprehensive BPM system in a complex business environment. And it faced an additional hurdle: resistance to change, especially because the new project meant moving from local dashboard initiatives to an enterprisewide BPM system.

How to outflank the resistance? The company adopted a two-pronged strategy: executive sponsorship and enterprisewide participation. A highly placed company leader became the single, accountable owner for the BPM initiative and set up a business intelligence competency center (BICC) composed of stakeholders from IT and the business lines — people who knew the business and its complex processes inside and out. The BICC group effectively linked the business and IT groups, often acting as a mediator, and created the data governance protocols, including responsibilities, accountabilities, decision rights, standards, policies, and data definitions.

Ensuring companywide buy-in was the responsibility of high-level executives of the business track. They determined the right KPIs by interviewing 30 key business and IT stakeholders and holding workshops with 20 groups across the organization.