Posts Tagged ‘decision making’

Piloting the Power of Business Intelligence

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In several of our previous blogs we have discussed the proper way to build a business intelligence enterprise solution.  Many of you have responded in agreement with much of the content and the steps required to truly unlock the potential of BI.  However, there are a number of readers who have reached out and asked for ways to promote BI within an organization that does not have a deep understanding or appreciation of what business intelligence can do. In other words, those that still view BI as mere reports.

Promoting BI certainly is a challenge if the organization has a lack of appreciation for what business intelligence truly represents.  However, there are still proven methods to promote BI within the organization.  The key way to do this is to find one area of the business that has acute pain, secure an executive sponsor who needs that pain resolved, and pilot the power of business intelligence.  Done correctly, the executive and business unit will become BI evangelists, spreading the word internally and driving the desire for business intelligence organization-wide.

The key to this approach is to deliver results in a very quick fashion.  Contrary to what has been preached previously on the holistic approach to BI, this will require an iterative development process, so you still need to be careful to treat this as a pilot and make sure the pilot does not become the foundation of the organizational BI structure and unknowingly paint yourself into corners that will later result in much rework.

In summary the steps to this approach include:

  • Find pain in the organization.
  • Secure an executive sponsor that requires a solution to that pain.
  • Take an iterative approach to development.  The first delivery may not be perfect, but show speed of response. (Also don’t worry about getting every BI requirement correct the first time.  Let the process develop the requirements. )
  • Demo the solution — perhaps start with a simple dashboard (see our earlier blog on how to build a proper BI dashboard) as this will help displace the myth of BI as a simple report.
  • Tweak the solution based upon feedback.
  • Once tweaked, let the business begin to utilize the BI solution, appreciate it and evangelize. Once it realizes BI truly helps enable more mature decision-making, that’s when buy-in occurs.

Hopefully, done well, there will be an influx of requests for increased business intelligence analytics across the organization.  Once that need is established, you can take the proper steps to build out your enterprise BI program.

Questions about this? I hear them all the time. If you have any, don’t be afraid to reach out.


More links:

MIPRO Consulting main website.

MIPRO on Twitter and LinkedIn.

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Business Intelligence in the real world: aligning metrics (Part II)

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In my last post, I tried to lay the foundation for the value of aligning business metrics to make all areas of your business more strategic and value-rich.  Let’s see if I can take it a step further by way of illustration.

Let’s assume a scenario involving a roadway construction company. The top priority corporate objective and commitment to shareholders is to increase overall margin by 1%. In order to support that objective, each area of the business must put in place objectives to help impact the bottom line, including the HR organization.  In many organizations HR is traditionally viewed as necessary, but not necessarily strategic or a contributor to the bottom line.

So, work with me.

In our scenario, let’s assume the operation’s business unit has determined the best way they can contribute to the overall margin objective is to make 25% more use of a new type of machine which can lay pavement more efficiently and effectively and overall lay more pavement per day. However, this particular machine is more complex than other machines and requires specialized training and more experienced users. Remember, in order to hit the new margin objective, the new pavement machine requires an increased of usage by 25% for the year.

The HR business partner supporting the operations business unit now has to tie their goals and metrics to help operations hit their goals and thus directly contributing to the overall corporate objective. HR must put in place objectives to retain the skills required for this machines operation, cross-train individuals to operate the new machines and hire new skills that can operate the new machines. HR’s metrics map specifically to the operations team’s metrics which map directly to the overall corporate metrics. In this specific example, metrics are aligned top to bottom and across the organization.

It goes without saying that the data and data structure must be available and appropriate in order to successfully measure these metrics and create dashboards that monitor progress and success. However, if the data structure is present and objectives are in alignment, all aspects of an organization can be strategic and contribute to the overall success of the company. The HR business unit measures the cross-training it conducted which contributed to the number of qualified operators of the new machinery. The operations leader measures the number of hours the new machine was operated compared to last year. The finance team measures the profitability of the operations this year compared to last and quantifies operations increase in margin. Everyone works together towards a common objective, sets up metrics to monitor and measure their success and link them accordingly.

Sound like Pretendville?  It’s not.  BI, done properly, enables exactly this sort of objective alignment and cross-silo vision.

Business Intelligence in the real world: aligning metrics (Part I)

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In last week’s post, we discussed embedding Business Intelligence (BI) into the business process in order to create a workflow that is more value-add and beneficial. Now that we have explored that concept, I want to look at BI as a mechanism to make all areas of business strategic and value-add.

So, work with me here.

When one thinks about the value-add departments or business units within an organization, typically sales, product manufacturing, consulting are areas that immediately come to mind as revenue-generating critical entities to a company’s success. Often IT, HR, Finance or operations are considered enablers and required to do do business, but not necessarily critical to the revenue-generating or margin performance of a company.

With the right mindset, metrics and data, that thought process can change.

Early versions of BI certainly provided information and insight into the business, but they tended to focus on siloed information. Metrics were created by functional areas such as Finance, Sales, Marketing and HR. In order to truly provide value to the organization from top to bottom, the metrics must align from top to bottom across business units and eliminate silos. Certainly there is still value in maintaining HR, Finance and Sales-specific metrics, but if each area of the organization can align their metrics to corporate metrics and objectives, it can prove to be a powerful tool to help both the top and bottom lines of an organization.

This is a topic of massive interest these days as businesses struggle to make intelligent decisions that will help them run a strategic operation and be poised for the recovery in terms of competitive advantage.

It’s as simple as this: line leaders to middle managers to executives must have metrics and dashboards that are congruent and support one another.  In an upcoming post, I’ll detail a scenario that attempts to describe the alignment of metrics top to bottom across functional areas.  It sounds chock full of buzzwords, but really, it’s a key aspect of a proper BI deployment.

Stay tuned!

Using Business Intelligence to Survive the Recession, Part II

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In my last post, we took a look at what BI is and isn’t and how it can really be used to make real-world business decisions.  I promised you an example to help illustrate my point, so here we go.

Let’s take a buyer of raw materials in a production facility.  If that buyer is asked what type of report they would find useful, the answer may be a report that shows all purchase orders that have not been fulfilled and delivered and are overdue by 10 days or more.  That could be a very useful report, right?

Problem is, the report itself does not answer a key business issue, but does provide insight into issues that require further analysis.  It’s a standalone datapoint.  Let’s assume that we now want to provide that same buyer a dashboard that answers a key business question and supports a positive financial influence on the organization.

When asked what we (MiPro) would do, it’s simple: we would execute a proper requirements-gathering effort based upon understanding an individual’s main work responsibilities.  Through this effort, we would come to better understand what information would provide value in a dashboard.  Asking that same buyer what they would do next with that information regarding 10 day overdue deliveries, the scenario may unfold such as this:

  1. The buyer takes every purchase order from the report and looks up (queries) what materials are on each purchase order (which would be another valuable report for that buyer).
  2. Then, based upon the materials that are on each purchase order, the buyer reviews the production schedule and determines if any production will be impacted (another valuable report).
  3. If a production line is negatively impacted, then the buyer works jointly with the production scheduler to determine whether materials need to be expedited or the production schedule can be changed.
  4. The buyer then works with the suppliers to communicate whether the materials require expediting.

As you can begin to see, in this scenario the true requirement would be a dashboard that identifies what production lines will be shut down due to overdue purchase orders not being fulfilled.  That’s real business value.  That’s way more than graphs and nice colors.  From our original user and problem, we find tremendous downstream effects leading to real business disruption.

With an intelligent BI implementation, our buyer could drill back into the details to take actionable measures.  The dashboard could offer true business value, answer key business questions and present significant risk mitigation to operational business and (ultimately) financial metrics.

In all of this, the buyer’s daily work process is used to define the dashboard that provides him/her with the most value.  The buyer may have been able to get to the answer without this process or dashboard, but it would have been through a time-consuming series of individual reports as opposed to logging in, identifying the issue at a glance and drilling back to the details.

There’s working hard and working smart, right?

So, how does this tie back to the original statement of using BI to improve the bottom line?  Certainly shutting down a production line is a Bad Thing, but being surprised by not being able to fulfill orders is an Even Badder Thing that still leads to a shutdown.  BI can help in preventing this from happening by making the buyer’s workflow more effective and mitigating risk, both of which contribute to financial success.

In my next post we will talk about making HR strategic and turning non revenue-generating business units into contributors to the top and bottom lines and provide another example of how to do this.  Stay tuned.

Using Business Intelligence to Survive the Recession, Part I

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There’s mainly one question being tossed around these days, at least as we hear it: how do companies not only survive but improve during times of economic recession?

One tool that can certainly assist is Business Intelligence (BI).  When one says BI, there are many reactions from “what is that?” to “oh right, you mean reporting” and the more classic definitions of “a set of concepts, methodologies, tools and software to improve business decision making based upon fact based data.”   Companies that view BI as just another IT tool or as a collection of reports will likely find it challenging to use BI to improve their top and bottom lines.  After all, reports provide data and information, but rarely answer business questions and provide decision making ability.   What glamour is there in reporting?

A well designed BI program certainly consists of reports, but also of other key tools such as interactive and “what-if” dashboards.  Regardless of the tool that is used however, the key is to design the solution that is embedded in the business process and truly answers a business question.   BI should be a normal part of the workflow of an individual’s day and executed in a manner such that BI actually influences and drives what a CFO, VP, manager, line leader or individual contributor focuses on for their workday.

Of course this is easy to say, but to execute it is another story, right?  Actually, it is not all that complex.  Truly what it comes down to is the mechanism and manner in which requirements are defined and gathered.  If you take traditional methods of simply asking what reports and individual or business unit requires, your answer will be plain and simple based upon traditional needs and not necessarily based upon new capabilities of software or based upon the daily workflow process.  However, if you deploy a requirements based upon workflow approach, the results can be dramatically different.   We still haven’t explained how we do this, so stay tuned for that post.  It’s coming next.