Understand, align and optimise

According to Eric Rogge, VP and Research Director at, Ventana Research, before going ahead with a BI solutions we should evaluate the alternatives against three dimensions of performance.

Large-scale business intelligence success stories share a common trait: deployment goes beyond small communities of business analysts to include frontline workers and their managers who use the technology in a variety of operating contexts. This is just the next step of an evolutionary migration of BI use to the enterprise as a whole.

Where initial users of BI focused on strategic planning and analysis, today’s operational use of BI optimises operational performance, improves daily decision-making and, in leading organisations, drives actions. Ventana Research’s recent studies show that deployment of BI software to facilitate business operations is prevalent throughout the corporate environment. Ventana Research believes that those goals drive the large majority of business intelligence software licence purchases today.

Several specific needs drive operational demand for BI. One clear goal for companies is to improve their operational performance. But, performance management, the processes of improving overall business performance, and specifically of improving performance of business operations has been with us for a long time. The use of reports to improve business operations has been around for a while too. Yet, operations personnel need more information to do their jobs effectively. Businesses are increasingly using BI software to drive and manage operational business performance. Leveraging advances in thin-client web-based application delivery, service oriented architectures, metadata management and GUI interfaces, BI platforms have evolved and have become an efficient means to support business operations.

Today, many organisations take a bottoms-up or a tactical approach to applying BI software to performance management. The tactical approach usually addresses a specific issue with business performance that can be solved with a simple solution. However, while it is good to act tactically, it is also good to think and plan strategically. Strategic requirements are also driving large-scale BI deployments. The selection of software used for performance management should therefore be done with an eye for how it fits within a larger, enterprise-wide performance management architecture.

To help with that evaluation effort, Ventana Research has defined a performance improvement framework that consists of three phases: understand, align and optimise.

The performance management cycle
An essential insight required to benefit from the application of this framework is the realisation that understanding business processes is only a part of an overall performance management effort. To have an optimised performance management process, two additional process phases are required: optimise and align. During the optimise phase, planning and forecasting occurs. As opposed to the understand phase, which has a rearward or historical perspective, the optimise phase takes a forward-looking or future perspective. Including a forward-looking perspective in the performance management cycle gives organisations success benchmarks against which to measure their progress.

The third phase, align, enables stakeholder agendas and actions to be aligned with the organisation’s strategy through definition of objectives and targets. It is also important to note that organisations are faced with big challenges in each phase of the performance management process. Within the understand phase, the biggest issue is integrating data from multiple distributed data sources. This problem should not be unfamiliar – after all, data integration and BI are key underpinning technologies for performance management and especially for understanding an enterprise’s historical position. But it is in the second two phases of the performance management cycle where organisations need the most development.

Any evaluation of software to support or facilitate performance management should compare candidate functionality against all three phases of performance management. These two phases are where a strategic perspective on deployment of business intelligence solutions can provide benefits above and beyond improved understanding. The leading challenge for companies is balancing the effort they make in each of the three phases. At a more tactical level, implementation issues, of course, differ for the optimise phase. Planning and forecasting are collaborative activities, so implementations must address issues surrounding collaboration.

Implementations for the align phase must handle delegation of responsibility and tasks so that the chain of command is enabled and not undermined. Having sufficient mid-manager interaction during implementation is particularly important.

Returning briefly to the understand phase, while BI software has long been used to understand past performance for businesses, it is still vital because data and information volumes are exploding. BI dashboards promise to not only deliver information, but prioritise it according to the organisation’s and viewers’ agendas. For every 10 organisations that deliver information via parameterised reports, seven organisations now have dashboards implemented for some purpose. Dashboard implementation can be done in a variety of ways. Choosing an approach depends on a variety of factors, including:

• Functionality
• Scale
• Customisation
• Pre-existing infrastructure
• Budget

Leading advances in dashboard software centre on functional breadth and degree of integration with other BI technology. Examples of purpose-built dashboard software products include Business Objects’ Dashboard Manager and Cognos’ Metrics Manager. Dashboards have also been deployed via browser-delivered reports with gauge presentation and hyperlink-based drilling. Other dashboards have been deployed using interactive visualisation components (e.g. Hyperion’s Intelligence Dashboard Builder) that communicate with underlying multi-dimensional or relational databases.

The need for rapid deployment will drive innovations that empower developers to more quickly configure and customise dashboards. The need for improved business operations support will drive further extension of collaboration features, prioritisation support and integration with other software such as Microsoft Office and other packaged applications used by front-line workers. The need for a broader view of customers, products and other business elements will drive streamlined integration of data from multiple sources. Up-to-date information, meaning real-time data, will also become more important.

Coming back to the optimise phase of the performance management cycle, assessing the future is a key part of that effort, because plan benchmarks against which performance is measured to determine the level of success. The challenge with deploying scorecards is that implementing a methodology can require significant changes to organisation behaviour, which is often more difficult than the implementation of the technology. Balanced scorecards are only one approach to implementation. Innovators in the scorecard product area include: Cognos, which offers one product that can provide both dashboard and scorecard functionality; Pilot Software, which includes initiative management within their scorecard product; and Business Objects, which integrates task management and threaded discussions into its performance manager product.

As with dashboards, scorecard products from these vendors include feature extensions such as collaboration facilities, integration with analysis software and browser-delivered user interfaces. Vendors are advancing integrated products that can cover two or even three of the phases of performance management. These integrated products will be further embellished with features that provide collaboration and information integration.

BI software vendors lead the way with their platform offerings. Nevertheless, available solutions are by no means complete and done, significant innovations are yet to come. Performance management solutions will yet evolve to be more integrated, faster, more flexible and more powerful. There are a number of vendors that now offer relatively comprehensive performance management solutions. These vendors include: Business Objects, Cognos, SAP, etc. Clearly, both BI and ERP vendors are competing for performance management project opportunities. Yet, no clear segment leader has emerged.

Because BI technology provides much of the performance management solution requirements, a BI vendor may ultimately take the lead, but that is far from certain. As with airplane evolution, expect performance management software to evolve into unique applications and application platforms.