While well-entrenched in many enterprise processes, BI is an investment that has not lived up to its full potential. Much of the information is still a rearview mirror analysis of business results and outcomes manipulated by business analysts periodically. Where traditional BI has produced limited results, operational BI is succeeding in directly driving business performance.

Operational BI, defined as the continuous delivery of relevant, time-sensitive information directly into the hands of operational decision-makers, provides deeper and broader insight into the fundamental metrics driving the organization’s performance: materials and manufacturing, suppliers and inventory, logistics and shipping, customer and partner interactions, people and processes.

A fundamental shift is required for BI to deliver improved operational results as an effective decision-making tool. Interactive dashboards are an excellent starting point for taking BI into the operational arena. However, in order to transform BI from an expensive, time-consuming, specialist-only tool to something that is useful to all decision-makers, it must become truly "operational."

Whether you’re considering an investment in operational BI or exploring ways to make the most of an existing deployment, the following 10 strategies will help you maximize the value of the underlying technology, while aligning it with your most important assets – your people – for a successful performance management initiative.

Expand Your Definition of the Enterprise

Disconnected, outdated methods of reporting and inconsistent metrics make it nearly impossible for today’s businesses to get a holistic view of company performance drivers. Since business is no longer confined to the physical walls of the enterprise, the only way to effectively improve performance is to align internal operations with external benchmarks. The ability to combine operational, production and business metrics from both inside and outside of the enterprise - such as gaining visibility into a supply chain partner to deliver quality goods to meet demand on time and in full - is critical to optimizing performance. Operational BI cannot be limited to a single type of metrics, but must include a broader scope of data across entire value streams that capture all relevant information needed for effective decision-making.

Establish a Performance Improvement Team

 You must tap into strong leadership who can carry the flag for data-driven dialogue and evidence-based decision-making. One way to do this is to set up a centralized (or at least coordinated) performance improvement team, made up of individuals from multiple operating divisions. Most should have some formal process improvement training, such as Six Sigma black belt, theory of constraints and/or lean process. Additionally, they should have broad knowledge of all areas of the company in order to identify opportunities for performance improvement with the largest return potential. As more companies establish centralized performance improvement - or "strategy and continuous improvement," "process excellence" or "business excellence" - teams, we can anticipate a new C-level executive: the chief performance officer.

Agree on the Right Performance Metrics

Focused key performance indicators (KPIs) and Key Performance Drivers (KPDs) are the foundation for any successful performance improvement initiative. Only with predefined metrics consistent across the entire organization can teams of people and individual decision-makers drive toward a common goal, aligning daily operations with broader business goals.

Understand and Interactively Analyze Performance

Simple reporting and storing of KPIs is a good start, but it needs to be taken a step further. Static displays are unable to provide actionable information. Instead, use interactive visualization and analysis to drill into the metrics and identify the root cause of performance issues and opportunities for performance improvement.

Ensure Value Streams Live up to Their Promise

In conjunction with identifying a focused set of KPIs and KPDs, identify the appropriate value stream segments that drive business outcomes and deliver the most value to your customers. Be it contact to sale, raw materials to finished goods or order fulfillment, a value stream is a sequence of processes connected by a common customer, product or service request. By evaluating metrics within the context of a value stream, you can break down silos of data and share functional information across various value stream segments and associated roles. If data spans multiple value stream segments and is delivered in context, you will eliminate conflicts of interest across different roles and processes and ensure that your business’s overall value stream delivers the optimum performance possible.

Synchronize Cross-community Activity

 Your core business activities - from management of dispersed franchisees and supply chain partners to outsourced manufacturing - requires synchronicity across the entire community. By connecting multiple data sources across collaborating companies (that are potentially located in different countries), you will improve data access and visibility for all decision makers.

Continuously Improve Data Quality

One difficulty in bringing together data from multiple sources is that variability and inconsistencies can be introduced. It is important to set expectations for and deliver on the need to continuously improve the quality of underlying data. Do not wait until the data is 100 percent perfect or you will lose the opportunity for competitive advantage during the lag time.

Start by ensuring the most appropriate data sources are used for each metric. Then do a first-pass data cleansing to provide a reasonable baseline. As data is loaded, ensure exceptions and anomalies are identified and quarantined so that the data store is not corrupted. A process is required to identify: data errors that require correction at the source, changes that are valid and should be accommodated, or inconsistencies across multiple sources that can be supported through the use of aliases. In this way, the quality of the metric data store can be preserved and the quality of the incoming data can be continuously improved.

Define Alert Conditions and Ensure Immediate Notification to Appropriate People

There’s no question that decision-makers need to be aware of potential problems as they happen. But, are you confident that they have the fast, easy access to the actual condition causing the issue, together with contextual information and appropriate diagnostic and corrective guidance to facilitate analysis and remediation?

Operational performance improvement is dependent on the following steps:

  • Capturing and predefining changes that impact performance;

  • Notifying decision-makers of events and alerts immediately together with contextual information;

  • Triggering predictive performance alerts proactively;

  • Conducting interactive analysis to identify cause and effect using best practices and diagnostic guidance; and

  • Closing the loop by assigning actions and monitoring effectiveness of the actions.

Bring Outsiders In

The ability to refine and share best practices is not only dependent on IT core competencies, but also, should incorporate external vendor capabilities and consultant best practices. Work with partners to capture and embed knowledge regarding metrics, predefined KPI calculations, alert conditions and diagnostic actions into your operational BI solution and processes. Ensure this knowledge is specific to your industry and process areas. With these reusable "industry intelligence modules," you have the ability to connect internal performance drivers and results with external best practices and methodologies in order to deliver the most effective approach to improving operational performance.

Make Improvement Sustainable

By project managing the rollout of operational BI with user training, usage monitoring and followup satisfaction surveys, you will ensure optimal adoption and value from your performance improvement initiatives. Of course, an intuitive user interface that makes it very easy to analyze performance combined with a single version of the truth in the form of a centralized metric data store, helps users to quickly become productive. A cost-effective SaaS solution that is fast to deploy also ensures widespread usage is viable and value is delivered quickly.

As operational BI solutions continue to evolve, they are leveraging new Web 2.0 technologies to deliver rich, Web-based user interfaces that provide intuitive performance metric visualization and interactive analysis suitable for decision-makers. These tools are also using SOA to enable multifaceted integration between the various disparate systems and a SaaS delivery model. Cost-effective and easy to integrate into your existing IT infrastructure, the SaaS model enables the simple gathering of data from multiple sources both internal and external to the organization and presents authorized information to all appropriate stakeholders. Plus, it simplifies deployment and, when combined with Web 2.0 capabilities, improves ease of use, driving buy-in throughout the entire organization. With consistent use comes continual performance improvement.

Especially in our current economy, where budget and resource constraints significantly impact daily operations, it is critical that companies embrace the benefits of operational BI for sustainable performance improvement - one based not only on technology value, but also on efficiency and effectiveness of people, processes and best practices.

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