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Effective Visual Presentations In Performance Reporting
The spectrum of business intelligence (BI) users spans a group of professionals ranging from programmers, engineers, IT specialists, and scientists on the technical side to salespersons, marketers, accountants, economists, HR pros and operations types on the business side. Additionally, managers and executives are included, cutting across both. In some senses, the management and executive users are frequently removed from the "heat" of the BI battlefield, thus requiring special treatment due to the more generalized nature of their job descriptions.
Presenting business performance metrics to this user group is one of those cases where special treatment in often needed. Specifically, performance reporting techniques that are geared to more effective visual presentation. Stephen Few, in a White Paper prepared for the Cognos Corporation, discussed a number of interesting characteristics of effective visual displays. Graphs, he suggests, were invented to give meaning to quantitative data beyond that contained in a table of numbers.
He goes on to note that both serve a very different purpose and should be selected to present information very carefully. For example, tables are wonderful when the information to be presented requires the observer to choose values. Tables are also useful when precision in the values is required. Graphs, on the other hand, create relationships between values through the discerning of size, shape, or color. As such, there is no substitute for a properly designed graph when communication of trending, patterns, or exceptions is desired.
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Cognos Tip: Rationale For Linking Business Function Areas With BI Planning Software
Cognos.com Tip: Establish key goals and metrics for business function areas (marketing, finance, human resources, etc.) because these are important pre-requisites for data mining and manipulation in business intelligence software. This foundation-laying process leads directly to analysis of the information to facilitate planning, forecasting, and decision-making.
The planning process links them with the relevant dimensions, ensuring that resources are allocated and expectations set against financial and operational goals. In this way, the planning process ties back from decision-making processes through the assorted business functions of the organization, and eventually into the reporting process and, eventually, the financials. This illustrates how BI can serve an entire business enterprise and can permit management to monitor performance, allocate resources, and set plans for future financial targets.
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Deploying Reporting Software
Deploying reporting or any other type of business intelligence software capability is a complex and difficult process that is often hard to standardize.Help in accomplishing this capability may come from a concept pioneered by the BI developer, Cognos.It is called the BI Competency Center and is based on three suppositions:
·The deployment must connect to senior management, users, and vendors.
·There must be adequate financial support from the CEO and CFO levels.
·Appropriate staffing must be provided by the CIO function.
In order for the deployment to be successful and lead to financial and performance gains, the following observations apply:
·The business reporting software must be used at every level of management.
·The functional business areas served must be data driven (retail, multi-site, or vertically integrated manufacturing are examples.)
·The functional engine must be provided from within the IT department.
·Corporate executives must be the ultimate users.
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Cognos Tip: Chasing Numbers: Sound Financial Reporting And The Role Of Business Intelligence
Cognos.com Tip: Establish a higher priority for better planning tools and forecasting software. Such a planning process should focus on key economic and business drivers, the KPIs (key performance indicators) of performance planning. Try to make these improvements: ·Consistency across corporate planning and forecasting ·Plan from the top-down ·Streamline the process cycle time ·Forecast the future with both historical data and predicted key economic drivers Furthermore, the ultimate goal from pursuing this approach is suggested to be a transition to rolling forecasts and a subsequent organizational planning revolution.
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How Performance Intensive Is Your Business?
The book “The Performance Manager,” Mosimann, et al, cited work by the McKinsey Quarterly that identified three characteristics of business performance:
Transformational – activity involved with extracting/converting materials into finished goods.
Transactional – processing materials from basic form to applied products.
Tacit – procedural activities, such as retail sales or performing services, requiring tacit or experience for success.
Among the observations made regarding these interesting categories of business, the authors note that there have been more economic gains in tacit work activities.Is this possibly an effect of technology?Then they note that investment continues to be heavier in transactional activities.Is this a result of the decades old trend of shedding labor in favor of automation or off shoring?Finally, it is suggested that it was harder to sustain a competitive edge in both transactional and transformational business.Does this follow the adage of: if it’s easy to do, everyone does it?These observations seem to raise interesting indicators of how intensity of work performance can help classify your business.
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Cognos Tip: An Example Of A Government Performance Management Model
Cognos.com Tip: Governmental bodies and executive branch agencies and departments are energetic users of government performance management software technologies. Applying the constructs and concepts of BI to the government model is straightforward and compelling.
Imagine a military aviation development program for an innovative surveillance system to be used on a tactical aircraft or UAV (Unmanned Aerial Vehicle). The decision maker is the development program manager and is responsible for technical development, cost, schedule and integration. His team is comprised of government program and technology experts, cost analysts, component project managers, and assorted industry contractors and manufacturers. For the purposes of this summary, all decision processes are assumed to be internal.
During such a development effort, the program manager will be required to make any number of important decisions that depend on answers to these fundamental questions about the project: · How are we doing and where do we stand? · Why are we at that state? · What else should we be doing? The answers are at the heart of performance management. The core capabilities of the government performance management model - scorecarding, reporting, analysis, budgeting, and planning – just as in the corporate world, provide the information needed to answer these questions in the most efficient manner.
If you’re considering government performance management technology, check out the Cognos 8 system. It employs a comprehensive performance comparison capability that integrates scorecarding, business intelligence and planning technologies. Using the Cognos system, the government performance program manager gathers information for decision-making in four typical areas:
·Link plan targets to scorecards: In the planning process performed in the early stages of the development effort, key performance targets - possibly defined through Cognos Planning – were developed and can be converted into scorecards. With such planning, the metrics that guide future development tasks are set; with scorecarding, the manager measures progress towards goals determined from established and specified goals.
·Reporting on plans and budgets: Since many government and industry participants are stakeholders in the development project, the analysis and reporting against planning data sources and published plans from government repositories, as well as those submitted by contract from outside of the government.
·Event management for planning and budgeting: The alerts needed to manage the continuous planning and adaptive control processes. Events for the planning workflow are defined and if a critical value crosses a threshold (e.g., a phase development sub-plan is ready for review), the appropriate owner can be notified and respond.
·Data for plans and forecasts: The automated system provides a comprehensive view of operational and transaction information. The decision maker uses this data to populate planning and forecasting models. By using current operational data, a more accurate, forward-looking plan is maintained, and adjusted with day-to-day status reports.
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Forecasting In The Supply Chain
Business intelligence is all about employing processes and tools to achieve efficiency in commerce. These technological approaches include all business functions that occur across the enterprise, including the supply chain.Assumed within this quest for efficiency is the ultimate goal of maximizing profit through minimizing operating costs. In order for this to become reality, the performance management-savvy organization must frequently rely on the application of analysis techniques like maximizing gross margin through measuring inventory return on investment or minimizing total operating expenses. Accordingly, supply chain optimization must look at the general problem of putting goods into the hands of one’s customers at the best cost and highest yield.
The classic approach to solving this optimization problem has involved traditional forecasting based on historic demand and prediction of future events. This approach is applied to aggregate data resident in smaller data repositories that require little manipulation. The analyst then manually manages any variability in the metrics. Using this forecasted demand, a plan is crafted that addresses the salient supply-related objectives, such as manufacturing rate, plant resource scheduling, re-stock strategy, or transportation modes.
The BI supply chain forecasting and reporting ability resident in today’s software solutions provides the technical ability to access and manipulate larger databases more swiftly. The metrics are gathered and manipulated using automated processes and key performance indicators using advanced capabilities, like scorecards and dashboards. Some vendors have integrated these features into their BI products and applying multiple modeling and analytic techniques to supply chain data to enhance the optimization problem.
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Cognos Tip: The Elements Of An Effective Business Intelligence Software System
Cognos.com Tip: Development of a corporate performance management capability using a business intelligence tool can be complex and resource intensive. In order to make the right decisions when selecting the vendor and software that will, arguably, change the company forever, understanding the basic elements that should be included is valuable. According to a 2006 white paper from the vendor Cognos, there are five key elements incorporated into their product suite:
·Scorecarding - Link initiatives and projects to strategy with metrics and strategy maps. Use the same scorecard metrics to drive enterprise planning software for integrated performance management.
·Analysis - Explore and analyze large volumes of data covering all dimensions of the business, whether stored in OLAP or dimensionally aware relational sources.
·Reporting - Create any type of report, for any user, with any data.
·Dashboards - Deliver Web-based dashboards with information from different data sources in a single visual report. Provide an at-a-glance snapshot of the business.
·Business event management - Business event management goes beyond the basic notification functionality provided in other products to automate the decision-making process, launch business processes, and integrate with Business Process Management (BPM). Where human intervention is required, through decision-process automation, event management notifies the people who are accountable and provides the relevant information they need to resolve the issue.
Many vendors offer similar business intelligence tool groupings, both integrated (like Cognos) and tool-by-tool. Careful research will lead the procurement team in the enterprise planning necessary to acquire an effective system.
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