Dashboards are used for many purposes within an organization – whether to share information, to measure key performance indicators (KPIs), to manage performance or employees, etc. – the role of visualizing and tracking information via dashboards is becoming a main source of information and insight for decision makers. Add to this the ability and requirement for intra daily updates and it becomes obvious that dashboards can be quite dynamic and serve many purposes. When looking at dashboards in this light, using them for performance management is one area that can provide additional added value to current BI analysis capabilities.
Performance management and BI have overlapped since the term became mainstream. Consequently, performance management functions have been able to take advantage of BI tools such as dashboards to enable better management of the measurable processes. What this means is that organizations can visually see the information they require, whether in the form of charts, graphs, drill through reports, or more advanced visualizations. The ability to use these visualizations as output for performance management processes or to view how employee or sales performance is being measured against set targets enables decision makers the ability to quickly identify discrepancies, areas that require improvement, or areas that are exceeding targets. This type of visual benefit saves people the time and effort of searching through information, accessing drill through or parameter-based reports, and gives people direct access to an overview of all of the information they require. What this truly means is that organizations can use their metrics as a key tool to help drive their performance management strategy.
Getting the most out of KPIs
Any dashboard created will have a set of measured metrics or indicators being monitored. Whether these are sales amounts by region or salesperson, or whether call center call volumes and the number of resolved incidents, the fact remains that just because something is being tracked, does not mean that it is benefiting the overall organization. In order for organizations to get the most out of their dashboards and to push beyond monitoring towards the management of overall performance across the organization, individual department goals must be tied to the overall strategic goals of the organization. This requires overall goals and direction to be defined and for these goals to be trickled down throughout the organization so that each set of defined metrics relates to something bigger than itself. This means that to manage the overall organization, strategic goals are required to provide guidance and long term planning for future success, while enabling business units to challenge themselves on a day-to-day basis. The best way to understand the link between tying in overall metrics to departmental goals and performance management is through the use of practical examples.
Examples of performance management metrics – beyond planning and budgeting
When looking at performance management, the first thought generally falls to planning and budgeting, activity-based costing and the like – in essence, the financial processes that surround the strategic execution of an organization’s overall goals. In reality, the strength of performance management is that it refers to more than just financial processes and includes the management of operational processes, people, and tying that to financial performance. Basically, overall performance management processes enable managers and decision makers to move beyond current performance towards the ways current actions live up to overall corporate goals. For example, the management of employee performance can tie into compensation management, sales, customer service, project and portfolio management, and measurement of marketing campaign success.
To show how each is tied into one another, each can be broken down into their individual parts and then metrics can be associated with each to provide an overall picture of how performance management can be tied to individual business initiatives.
Employee performance and compensation management
The management of employee performance is not always easy. Short of setting targets for sales staff or call volume targets for customer or technical support, it can be difficult to determine how employees are meeting up to their challenges and meeting the expectations of their managers and the organization as a whole. Consequently, the ability to adequately compensate people for superior performance and manage overall priorities can be haphazard. By setting targets and measuring those targets on a constant basis, organizations and employees can measure their progress, re-evaluate performance at regular intervals, and develop an objective process to identify how employees are performing without company politics affecting the outcome of performance reviews.
Sales performance can be seen as fairly straight forward. Setting targets by product, region, salesperson, etc. can yield positive results. Without additional information, however, the ability to predict what products will be more successful, where they sell most, why, and additional differentiators might be overlooked, thereby overlooking potential success factors.
Organizations focus on increasing retention, lowering turnover, etc. and try their best to manage these processes and measure progress. Within some departments, other employees are customers. Whatever the case, the reality is that in a world with increased competition, a positive customer experience helps drive future success of the organization and of products and services being offered.
Project and Portfolio Management
The management of an organization’s ongoing projects directly ties in to how budgets are allocated and spent. Whether projects are completed on time and within budget may affect future initiatives. Consequently, it becomes important to identify how projects are coming along to make sure that things are on track.
Although sales and marketing can be combined, each has its own value independent of one another. Where sales focus centers on how many units were sold or on services being delivered, marketing initiatives and campaign management are more intangible. Although it may be possible to identify how many leads were gathered and how many clicks from banner ads turn into prospects and later to customers, when looking at how an organization’s Web presence in general and interaction with communities on line specifically trigger future sales, the ability to integrate Web analytics becomes essential.
Tying it all to dashboards and successful metrics
Each of the above highlights how performance management and managing KPIs can help organizations optimize their performance. To really benefit from performance management, however, the key is to understand how each individual area relates to and affects one another. For instance, how marketing initiatives tie into an increase or decrease in sales, how internal projects affect customer experience management initiatives, or how sales and customer retention interrelates. These are some examples of how organizations can integrate their performance management solutions to get more out of their key performance indicators and how they can tie in strategic initiatives with departmental goals.
Although performance management and the use of dashboards generally start with one initiative and slowly expand across the organization, for organizations that want to get the most benefit from their solutions, it becomes important to tie individual initiatives towards overall goals. This means that performance management achieves best results when using an integrated approach. Instead of data silos and individual initiatives, organizations should look at their overall goals and work towards the creation of a holistic approach to defining, managing and attaching value to KPIs.
About the Author
Lyndsay Wise is an industry analyst for business intelligence. For over seven years, she has assisted clients in business systems analysis, software selection and implementation of enterprise applications. Lyndsay is the channel expert for BI for the Mid-Market at B-eye-Network and conducts research of leading technologies, products and vendors in business intelligence, marketing performance management, master data management, and unstructured data. She can be reached at email@example.com. And please visit Lyndsay's blog at myblog.wiseanalytics.com.
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