Pervasive Business Intelligence: Enhancing Key Performance Indicators
Information Management Magazine, April 2005
Business intelligence (BI) is on the move. Industry analyst IDC projects that the market for BI tools will grow from approximately $3.7 billion in 2002 to $4.5 billion by 2007.
BI is not only on the move, it also is evolving from traditional BI to pervasive BI (PBI), which empowers everyone in the organization, at all levels, with analytics, alerts and feedback mechanisms. It's a new paradigm with potentially enormous benefits - and far-reaching cultural implications.
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On the benefits side, PBI promises to:
- More effectively leverage the strengths of the whole organization by giving every employee the power to contribute to and enhance key performance indicators (KPIs) that have been set by management.
- Increase sustainable competitive advantage by helping to transform every employee into an "organization of one" who is able to make the right decisions at the right time in step with company and customer objectives.
- Improve operational efficiency by uncovering new best practices and driving those practices from the bottom up as well as the top down.
PBI represents a powerful tool for measuring progress against strategic corporate goals and KPIs that have been set by management and communicated throughout the organization. Individual contributors can have a greater impact on organizational objectives because when they are armed with real-time PBI, they are empowered to "do the obvious" - on their own initiative. People have greater freedom to realize their entrepreneurial selves in support of the organization. This model does pose cultural challenges. For example, in setting and communicating the organization strategy, managers may need to anticipate and address such issues as resistance due to fear of loss of control and uncertainty about how to use enhanced access to information from those who are not accustomed to acting on their own initiative.
Corporate Change from the Bottom Up
Another cultural impact is that PBI can create new levers for change. If management creates a clear strategy, defines it, implements a PBI solution to track progress against goals, and follows up and rewards people who meet their commitments, these activities will effect corporate and structural change from the bottom up. Instead of being frustrated by the organization's seeming inability to translate executive initiatives into day-to-day work (and what executive has not suffered this frustration?) initiatives can be implemented into workflow metrics and introduced into the workplace directly at every level. This approach also requires executives to frame actionable initiatives rather than vague "leadership messages" that few people can translate into day-to-day work. Through PBI, the company's executive leadership team can be very successful in allowing people at every level to understand exactly what expectations are placed on them and whether they are meeting those expectations.
The key for organizations is to embed PBI in their business processes. This requires top-down support for any PBI solution, which is a major change program. Overcoming the cultural resistance to PBI, particularly among first line managers, takes a lot of vision and drive from senior executives. It also requires a PBI solution specialist who can understand the organization's business, create a custom PBI solution to address gaps and pain points, and is willing to continually articulate and refine the proposed PBI solution extensively. For large, global implementations, it is especially important to start small and have an early success.
The Right Data at the Right Level
Getting and keeping everyone on the same page depends on how PBI is used to measure results against targets set for business activities, strategies and KPIs. Done successfully, everyone can have an intelligent conversation about the "elephant," even if the only part they actually touch is a tusk or a tail.
When PBI was implemented recently at a major international financial services institution, a PBI repository was created to help monitor specific KPIs focused on trade processing operations worldwide. Through dashboard interfaces with specific color-coded dials, employees can access KPIs for their particular tasks. For example, each person in the trade processing operations group can see how many letters of credit they are handling, the average processing time and which letters of credit fall outside the average service level agreements or need special attention. Individuals can also see how their colleagues in the same department are doing and how their department stacks up against counterparts.
Workloads can also be more effectively balanced. If Asia has a spike in volume, for example, then colleagues in Europe can pitch in. This not only benefits the financial services company by providing faster throughput, but also allows individuals to gauge their performance relative to their department objectives and to the larger corporate goals. All of this has led to many peer-to-peer and employee-to-manager conversations about sharing best practices and sharing workload to meet customer satisfaction goals and service level agreements.
At the next level, department managers can track the relative performance of individuals on a daily basis and react quickly to any changes, positive or negative, with appropriate management action. The PBI solution also gives them the opportunity to track trends in banking centers worldwide, understand different situations and explore how more successful workflows might be leveraged in their own departments.
At the executive level, company leaders can see individual and departmental performance summarized to corporate performance goals and have the ability to drill down as necessary on the contributing elements. Because the data is gathered and analyzed in real time to the lowest level of the organization, executives have gained an unprecedented ability to more quickly effect change on an enterprise-wide basis. Instead of implementing a policy and waiting for communications and feedback to be coordinated throughout the organization, they can track the immediate effects of a decision and make changes proactively.
To bring all this full circle - which is what PBI does - individual contributors at this financial institution now have many of the same capabilities as managers and senior executives, except that these capabilities are bounded by their job responsibilities. Like executives, they can track the immediate effects of their decisions and make changes proactively. And like mid-level managers, they can see changes in their performance and make self-management decisions on how to improve. They can manage themselves, instead of waiting to be managed from above.
Timing Is Everything
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