Class Agenda: 2/27/2014

1University of Nevada, Reno Business Performance Management1

Class Agenda: 2/27/2014

Understand BI in relation to business performance management (BPM).

Understand the importance of interface design to BI

Understand how interface design relates to business performance management (BPM)

2University of Nevada, Reno Business Performance Management2

Understanding the use of BI for BPM

Know how to pick your spot for data driven decision making (analytics).

Be able to create reasonable metrics.

Be able to design an effective business-oriented experiment.

Be able to design an effective user interface.

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Chapter 3 View of BI

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Chapter 1 View of BI

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Why have past BI projects failed?

What are the key factors that contribute

to those failures?

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Business Performance Management

The business processes, methodologies, metrics, and

technologies used by enterprises to measure, monitor, and

manage performance.

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Process of BPM

Strategize Plan Monitor/Analyze Act/Adjust

Strategize: Where do we want to go?To become the Harvard of the west.

(Stanford in the 1940’s)

To give unlimited opportunity to women. (Mary Kay Cosmetics)

To give ordinary folk the chance to buy the same things

as rich people. (Wal-Mart) To make people happy. (Walt Disney)

Sony in the 1950’s: Become the company most known for changing the worldwide poor quality image of Japanese products. Make “Made in Japan” mean something fine, not something shoddy.

Tasks in the Strategic Planning Process

1. Conduct a current situation analysis

2. Determine the planning horizon3. Conduct an environmental scan4. Identify critical success factors5. Complete a gap analysis6. Create a strategic vision7. Develop a business strategy8. Identify strategic objectives and

goals

Components of a strategy

Strategic visionA picture or mental image of what the organization should look like in the future

Strategic goal A broad statement or general course of action prescribing targeted directions for an organization

Strategic objective A quantifiable goal with a designated time period and a defined measurement method

Critical success factors (CSF) Key factors that delineate the things that an organization must excel at to be successful

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Planning: How do we get there?

Operational plan: plan that translates an organization’s strategic objectives and goals into a set of well-defined tactics and initiatives, resources requirements, and expected results for some future time period (usually a year).

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Strategy dictates planning

An organization’s strategic objectives and key metrics should serve as top-down drivers for the allocation of an organization’s tangible and intangible assets

Resource allocations should be carefully aligned with the organization’s strategic objectives and tactics in order to achieve strategic success

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Monitor: How are we doing?

Performance measurement systemA system that assists managers in tracking the implementation of strategy by comparing actual results against strategic goals and objectives • Comprises systematic comparative methods

that indicate progress (or lack thereof) against goals

• Requires the development of metrics.• All measurement is about comparison.

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You can’t monitor what you don’t measure

Key performance indicator (KPI)A KPI represents a strategic objective and metric that measures performance against a goal

Distinguishing features of KPIs:• Consistent • Time-related • Benchmarked

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What are the most common KPI’s for profit-making

organizations?

How about non-profit organizations?

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Balanced Scorecard Approach to Measurement

FinancialHow should weappear to ourshareholders?

CustomerHow should weappear to ourcustomers?

Learning & GrowthHow will we sustainour ability to change

& improve?

Internal BusinessProcess

What must we excelat?

Vision andStrategy

Act and Adjust: What should we do next?

Success (or sometimes mere survival) depends on new projects: creating new products, entering new markets, acquiring new customers (or businesses), or improving some process.

But, most new projects and ventures fail!• Hollywood movies: 60% chance of failure• Mergers and acquisitions: 60%• IT projects (large-scale): 70%• New food products: 80%• New pharmaceutical products: 90% …

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Act and Adjust: do it fast!

The goal is to fail fast. Or to know when something is

failing so that it can be adjusted before fully failing.

Or to fail on a smaller scale so that the effects of failure won’t be profound.

Or to be aware of why something failed so that failure produces learning.

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BPM “architecture”

So, where does Business Intelligence

fit in relation to Business Performance

Management?