Traditionally corporate governance was the responsibility of the board and its immediate delegates (top management and financial auditors); the focus was mostly on the financial measuring and monitoring of the organization. However, today’s global enterprises are much more complex: They are comprised of a constantly changing nexus of networked and distributed entities (many outside of the corporation’s direct control). Thus, governance activity must be extended both down into and outside of the organization to include an expanded role for internal staff and external entities. Governance is owned by everybody and not only is it dangerous for a small group of resources to exercise governance, it is downright impossible in today’s world. Information technology must help distribute the burden of governance. Business Intelligence dashboards are now a vital component of enterprise governance strategy, helping enforce policy and measure the performance and conformance to a multitude of governance directives.
In order to for a governance dashboard to deliver true value and competitive advantage, multiple dimensions (classes and categories) of governance must be tracked. The trick is that many weighted measures and relevant key performance indicators will differ from each other depending on the category being tracked. Of course, the inclusion of traditional and standard measures of performance are critical initial steps for governance dashboard implementation; nevertheless, to get a true enterprise perspective of performance, measures will have to extend beyond (traditional) motifs of financial performance into such areas as business process, learning and growth, and customer fulfillment/satisfaction. Other sub-categories or specific areas of control could focus on such things as:
- Data Governance and Stewardship
- Business Continuity and Federated Incident Command Systems (ICS)
- Competitive Intelligence
- IT Governance Audit and Scorecarding
- Business Rules/Process Gap Analysis, Mapping, Capture, and Standardization
- Outsourcing Governance
- Vendor and Procurement Management
- Employee Screening and Development
For many companies, governance methodologies are siloed by line of business and are not easily integrated or merged into a unified or single strategic dashboard. This is always the biggest obstacle to success in implementation. Creative and timely data integration models, rules, and routines will have to be devised in order for these dashboards to be robust and user-friendly. The IT department will have to be a constant strategic partner and stakeholder in corporate governance; IT supports the enterprise data and processes that supply any strategic governance analysis, decision making, and reporting. Without the alignment of IT and the business in corporate governance strategy, return on investment on implementation will forever lag behind what is promised by governance frameworks or methodologies. Any enterprise governance framework must include a compelling vision for information technology, i.e. a set of policies and procedures that attempts to align IT with the business for purposes of governance and beyond. Such policies can be broken down by:
- Measurements - Applying complimentary and symbiotic methods and metrics—top down and bottom up.
- Methodology - Creating a data architecture, platform, and infrastructure that will support a true enterprise knowledge management agenda.
- Knowledge – Documented IT and business procedures and definitions of data.
- Communication – Mechanisms to enable, drive, and manage true collaborative organizational change.
Per the above bullet points, applying the precepts of measurement is often the most challenging. However, the critical path to effective governance entails being able to agree upon and understand a list of generally accepted benchmarks and ratings of compliance and conformance to governance standards and policy. In addition, various types of maturity rankings can support the planning and monitoring of both the current and evolving capabilities of IT within a governance paradigm. For starters, overall maturity levels for performance measurement could be enumerated (from the highest level) as follows:
- Level 1. Each business silo has its own knowledge base.
- Level 2. Minimal integration and knowledge sharing between silos.
- Level 3. Methods of integration and knowledge sharing are documented.
- Level 4. The application of shared knowledge is managed and measured
- Level 5. Continuous innovation and optimization knowledge sharing and management.
A dashboard will codify all the knowledge that supports governance--business process, data specifications, corporate intelligence, metrics, standards, performance, etc.—into intelligent formats so that this crucial information lives in a sharable and scalable knowledge base or repository, outside of static requirements documents, making all a wide range of strategic business intelligence queries and projects more accountable, iterative, and successful. Enterprise data architecture will serve as a backbone to all governance knowledge portals and provide a foundation for business intelligence and corporate governance at large. Thus data architecture must be tightly controlled (especially via data governance), with best practices applied to all data repository and information storage constructs. Dashboard architecture will help subsidize, support and clarify the strategic objectives of the organization in manner that is customized and intuitive so that management is motivated and guided to make the most correct decisions on a daily basis. Architecture will provide for:
- Many Contextual Dimensions of Data - A variety of standards, strategies, and business areas are accessible, integrated, and easily understood and communicated.
- Continual Data - Real-time and dynamic data for various tactical and strategic objectives is delivered to users in a timely manner.
- Customized Data - Data is turned into value-added knowledge by both tight and loose adherence to user subject matter expertise, and core competencies. Leading indictors of business performance are tallied and derived in ways that conform to the varied domain expertise of the dashboard’s user base.
- Effective Units of Measurement- Progress will be measured through CSF and KPI. Critical Success Factors (CSF) define the most important processes and issues for management to address and review. Key Performance Indicators define measures to determine how well these processes are performing
- Breadth of Data – Full support for all types of corporate data:
- Transactional data
- Market data
- Reference data
- Enterprise Meta data
- Semantic Consistency
For all BI implementations, the enterprise data supply chain must retain the highest degree of integrity possible. Because the data architecture serves as a backbone of corporate governance, the data architecture must be tightly controlled (data governance), with best practices applied to all data repository and information storage constructs such as:
- Data Marts
- Data Warehouses
- Reporting Repositories
- Operational Data Stores
Sustainable corporate results require the proactive support and enabling of positive performance, appropriate risk taking, risk mitigation and control. The decision to build a governance dashboard should not be a one-dimensional resolution that comes about as a knee-jerk reaction to better mitigate the most obvious business risks or avoid regulatory compliance pain after the fact. Governance dashboards help businesses move toward accelerated gains in financial performance while maintaining the best possible communication with all corporate stakeholders. Both IT governance and general corporate governance must be directed toward the primary assets of the business--infrastructure, clients and external stakeholders, internal people and processes—while creating value for all stakeholders inside and outside corporate boundaries. The benefit for IT here is that such applications position IT as more than just service provider; they become a partner with the business, and an enabler of business goals, driving business results and strategy.
For more information on William Laurent please visit www.williamlaurent.com
Copyright 2008 - Dashboard Insight - All rights reserved.