One of the keys to successful implementation of corporate performance management (CPM) dashboards is selection of the appropriate framework (i.e., metaphor) to house all the metric, graphic, administrative, alerting and document linking components. Last month, we touched on the varying business needs of the different stakeholders -- the board of directors (BOD), executives, line-of-business (LOB) managers, functional managers and operational managers. Now we will explore in more detail how their specific business needs dictate which of the many competing "metaphors," such as briefing books, balanced scorecards and portfolio charts, fits the bill.
The Dimension of Needs
As a precursor to discussing the multiple framework options, we will focus on the business needs of the stakeholders. The dimension of needs matrix (see Figure 1) captures the functionality and subject content required to meet the myriad needs of the different stakeholders. These needs can range from mundane administrative tasks, such as calendaring, note taking and agenda access to more sophisticated activities such as capturing cross-business key performance indicators and real-time business forecasting. Examples of these dimensions include:
- Administrative: improve productivity by facilitating committee meeting activities such as event scheduling, agenda/minutes retrieval, hit-list creation and real-time document access.
- Collaboration: provide global anywhere, anytime access capabilities to enhance information sharing and proactive decision making to ensure that all business units and functional areas are using only "one true version of corporate data."
- Document Management: create an integrated repository to view in one convenient place all related corporate documents (presentations, reports, analysis), forms (expense, compensation) and meeting contents (agenda, notes, minutes) as well as external information (white papers, case studies, benchmark studies).
- Interactive Analysis: drill down on key performance indicators (KPIs) and other metrics to more detailed levels to understand causative factors driving business activities.
- Problem Resolution: identify and address issues before they become problems by highlighting shifts in customer preferences, new operational challenges or performance numbers falling outside accepted norms via alert notifications and status beacons.
- Scenario Evaluation: sensitivity analysis capability that provides ability to evaluate best, worst and most-likely case scenarios related to assessment of alternative strategies.
- Corporate Governance: manage allocation of dollars and resources, reliability of financial reporting, compliance with laws and regulations, and utilization of company assets from an enterprise perspective.
- Competitive Intelligence: ability to monitor and evaluate industry technology and trends, and consolidate market and financial information on present and potential future competitors using market-watch reports, press release alerts and industry forecasts.
- Performance Management: focus on the important business KPIs by tracking progress against plans, benchmarks and targets for the complete organizational hierarchy (enterprise, business unit, functional and operational levels).
- Regulatory Compliance: support compliance, certification and disclosure activities by providing status on important Sarbanes-Oxley (SOX) requirements (sections 302 - reporting omissions or errors, 404 -- internal control assessment and 409 -- real-time disclosure).
- Risk Management: manage all risks on a consistent and integrated basis across business units, locations and risk categories -- market, credit operational and business risks.
The functional and content focus dimensions can then be mapped to their respective stakeholders (as shown in Figure 1). It is apparent that the business needs profile for the board of directors, with the heavy focus (++) on administrative tasks, document retrieval and collaboration, is distinctly different than the interactive analysis and problem resolution needs of the operations manager. From a content perspective, executives are interested in competitive intelligence and regulatory compliance while the LOB manager is focused more on performance management. Keep in mind that this matrix only reflects a subset of potential examples for profiling your business stakeholders.
Figure 1: Dimension of Needs Matrix
With the business needs clearly identified, the next step is to select the dashboard framework (and "metaphor") that provide the appropriate content focus, visual flavor and development environment. Candidate frameworks include:
Board of Director Viewer: provides a board-level perspective on a company's health that focuses on corporate governance, regulatory compliance and performance management information and metrics. The graphical user interface can consist of "administrative" components such as calendars, agendas and notepads, with links to supporting documentation, reports, presentations and analysis, or it can show more of a "business" focus with enterprise KPIs that track important activities such as demand forecasting, customer service and product quality. Since passage of the Sarbanes-Oxley Act, BODs have entered a new "age of compliance" and are now required to validate their decision-making actions. Being well informed is now the new norm, rather than the exception. The BOD viewer facilitates meeting the new demands from a one-stop "command central" framework.
Briefing Book: allows users to measure all aspects of corporate performance from the BOD to the operations manager by leveraging a book metaphor, with individual chapters and pages devoted to specific business areas (risk management, strategy development, etc.) and KPI metrics of interest. At the executive level, where collaboration, document management and interactive analysis are key activities, briefing books provide dynamic KPI tracking and issue resolution, document linking capabilities and drill-down analysis options. Briefing books can be easily created by integrating multiple component building blocks such as descriptors, metrics and graphs for visibility at the appropriate business level. Another advantage is the ability to highlight (and track) problem KPIs via color-coded hierarchical views and cascadation technology.
Balanced Scorecard: leverages a balanced framework and strategic mapping methodology to develop KPIs that link company-strategic objectives with metrics, targets and key project initiatives. The four areas of finance, customer, internal process and learning and growth provide the "quadrant matrix" (or buckets) into which all metrics can be categorized. Proper balance of leading and lagging indicators, financial and non-financial measures, and short and long-term metrics are critical to ensure a balanced performance management perspective. We will discuss the balanced scorecard framework in more detail as we develop KPIs in a future column.
Portfolio Chart: creates "bubble chart" presentations of comparative company or external business data. This framework is often used to visualize data simultaneously across three dimensions, while providing interactive drill-downs to more detailed data. Functional area managers, such as purchasing managers, use this type of analysis to improve supplier management and rationalize vendor selection. In many situations, this framework is used in concert with briefing books as an alternative way to represent multidimensional data.
Operational Dashboard: focuses on managing and measuring business and process activities in real time or near-real time. Rather than providing a high level BOD or cross-business perspective, operational dashboards provide deep visibility on a specific business area or business process activity. KPIs and metrics are typically displayed by an assortment of dials, gauges and stoplights that resemble those found in a commercial plane cockpit. This information is subsequently aggregated and forms the basis for the enterprise KPIs and metrics.
Mapping and matching stakeholders' needs with the appropriate framework is a critical step in selecting the look and feel for your CPM dashboard. This process ensures that a senior executive will not be monitoring low-level operational information with gauges or that an operations manager will not be involved in tracking Sarbanes-Oxley compliance. Next month, we will shift our focus and examine the more visual components of an effective CPM dashboard.
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