© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Performance Dashboards -- and – Business Performance Management Business Intelligence Tools and Techniques Robert Monroe April 17, 2008

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Key Take-Aways Performance dashboards are part of a broader movement towards data-driven management, supported by tools that can get the right information to the right person, at the right time (BPM) There is a lot more to do to effectively implement performance dashboards than simply creating some whizzy UI’s and hooking them to a database –Figuring out what you should be measuring, and how –Enabling your data infrastructure to support ‘right-time’ data flow Select your dashboard tools and infrastructure based on your organization’s goals, infrastructure, and strategy

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Agenda Quick examples of performance dashboards Core principles of business performance management Metrics and Key Performance Indicators (KPIs) –Criteria and challenges for selecting metrics –In-class exercise with KPIs

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Quick Demo – Xcelcius Dashboards Xcelcius dashboard samples are available at: – Dashboards tool by Xcelcius / Crystal / Business Objects / SAP Feel free to open up the examples and follow along

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Dashboards and Business Performance Management: Core principles

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Making Whizzy Dashboards Is The Easy Part… EAI/Data Integration Data Warehouse & Data Marts ETL/Data Cleansing Systems/ Business Analysis Image Source Reporting/OLAP Infrastructure

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Business Performance Management (BPM) An emerging, loosely-defined set of technologies and business practices that: –Emphasize and support data-driven management –Rely on technology to provide the right information to the right people at the right time to make effective, data-driven decisions –Collects, coordinates, and integrates information from a variety of different BI/analytic technologies to present a holistic view of business performance through a set of Key Performance Indicators (KPIs)

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe BPM Presents Some Difficult IT Challenges Integration of disparate data sources Move to ‘right-time’ updating of analytical stores Need to support notification and publishing of events and changes to important data –Frequently handled with an EAI architecture May need to touch/integrate with many legacy systems Security and access control

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe BPM Presents Some Difficult IT Challenges Diagram Source: Hoffer, Prescott, McFadden, Modern Database Management, 7 th ed.

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe BPM Presents Some Difficult IT Challenges Diagram Source: Hoffer, Prescott, McFadden, Modern Database Management, 7 th ed.

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe BPM Presents Some Difficult IT Challenges Diagram Source: Hoffer, Prescott, McFadden, Modern Database Management, 7 th ed.

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Dashboards and Scorecards Presentation portals for BPM systems Dashboards monitor operational processes Scorecards monitor progress towards tactical and strategic goals I’ll use the terms interchangably for the rest of the talk Source: [Eck06] DashboardScorecard Purpose Measures performanceCharts Progress Users Supervisors, specialistsExecutives, managers, staff Updates Right-time feedsPeriodic snapshots Data EventsSummaries Display Visual graphs, raw dataVisual graphs, text, summaries

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Dashboards Typically Support Three Functions Monitoring –Operational metrics, progress towards goals, key indicators Analysis –Portal to reporting and OLAP capabilities Management –Collaboration, , task assignment, on- and off-line An effective dashboard system transparently integrates the three tasks, with context flowing between them

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Operational, Tactical, and Strategic Dashboards OperationalTacticalStrategic Purpose Monitor operationsMeasure progressExecute strategy Users Supervisors, Specialists Managers, Analysts Executives, Managers, Staff Scope OperationalDepartmentalEnterprise Information DetailedDetailed and summary Updates Intra-dayDaily or weeklyMonthly or quarterly Emphasis MonitoringAnalysisManagement Source: [Eck06]

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Operational, Tactical, and Strategic Dashboards Strategic Tactical Operational

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Three Levels Of Information Presentation Summarized graphical view –Emphasizes KPI’s –Broad view at-a-glance –Heavy summarization Mutlidimensional view –Explore summary to evaluate why things are as they are –Generally drop into OLAP or reporting system (transparently) Detailed reporting view –Drill-down to specific underlying details

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Metrics and Key Performance Indicators

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Selecting Key Performance Indicators (KPI’s) Choosing what to measure is arguably the most important step in dashboard design and deployment –Business truism: “What gets measured gets done” –Monroe’s corollary: so choose what you measure carefully… Doing so is at least as much art as science Beware unintended consequences –Malicious/self-interested gaming of the system –Mixed signals –Too many metrics cause loss of focus

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Leading vs. Lagging Performance Indicators For BPM, dashboards should focus on leading rather than lagging indicators –Change what is coming up, not what has already happened –Doing so may require a bit of a shift in mindset How might you convert the following lagging indicators into leading indicators? Are any of them leading indicators for other metrics? –Sales revenue –Market share for product x –New customers acquired per quarter –% of Salespeople meeting quota –Employee satisfaction –Customer satisfaction –Returns due to defects Source: [Eck06]

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Characteristics of Effective KPI’s Aligned Owned Predictive Actionable Few in number Easy to understand Balanced and linked Accurate Standardized Context driven Reinforced w/incentives Relevant Source: [Eck06] “We never create a report that won’t change behavior” -- Wise policy of an anonymous CIO

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Developing KPI’s Requires effective business and systems analysis work Can be done top-down and/or bottom-up Standardize, standardize, standardize! Basic elements of a KPI specification –Identify what is being measured and how it is calculated –Identify where the data for the KPI will come from –Identify units, thresholds, and targets (configurably) Less is more

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe In-Class Exercise: Key Performance Indicators Form groups of 2-4 people Work in groups on exercise handed out Discuss results and findings

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Exercise Reflection Common themes? What made this exercise challenging? –Is it obvious precisely what the key metrics are in your case? Thoughts and reflections?

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Wrap-up

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe Key Take-Aways Performance dashboards are part of a broader movement towards data-driven management, supported by tools that can get the right information to the right person, at the right time (BPM) There is a lot more to do to effectively implement performance dashboards than simply creating some whizzy UI’s and hooking them to a database –Figuring out what you should be measuring, and how –Enabling your data infrastructure to support ‘right-time’ data flow Select your dashboard tools and infrastructure based on your organization’s goals, infrastructure, and strategy

© 2007 Robert T. Monroe Carnegie Mellon University © Robert T. Monroe References [Eck06] Eckerson, Wayne, Performance Dashboards, Wiley, 2006, ISBN: