1. CISB594 – Business Intelligence Business Performance Management

2. CISB594 – Business Intelligence Reference Materials used in this presentation are extracted mainly from the following texts, unless stated otherwise.

3. CISB594 – Business Intelligence Objectives At the end of this lecture, you should be able to: Describe the business performance management (BPM) Explain the BPM’s closed-loop processes linking strategy to execution Describe the differences between scorecards and dashboards Describe some of the basics of dashboard design CISB594 – Business Intelligence

4. BPM Introduction More than a technology It is difficult for a business to align its strategies and actions in such a way that they ensure successful performance. BPM addressed this alignment.

5. CISB594 – Business Intelligence BPM defined An umbrella term covering the processes, methodologies, metrics and technologies for enterprises to measure, monitor and manage business performance and drive the overall financial and operational performance of an enterprise. It helps organization to translate a unified set of objectives into plans, monitor execution, and deliver critical insight to improve financial and operational performance.

6. CISB594 – Business Intelligence Summary of BPM Process BPM consists of closed-loop set of processes that link strategy to execution in order to optimize business performance BPM closed-loop processes: Strategize : Setting goals and objectives (Where do we want to go?) Plan : Establishing initiatives and plans to achieve those goals (How do we get there) Monitor: Monitoring actual performance against the goals and objectives (How are we doing) Act and Adjust : Taking corrective action (What do we need to do differently)

7. CISB594 – Business Intelligence BPM Closed-Loop Processes

8. CISB594 – Business Intelligence Strategize: Where Do We Want to Go? Strategic planning – Strategic objective A general course of action prescribing targeted directions for an organization e.g. To provide technology based services to clients e.g. To increase the number of Postgraduate student intakes – Strategic goal A quantified objective with a designated time period e.g. To ensure at least 80% of the clients have an account with the online service offered by 2012 e.g. To reach 50% increase in numbers of Master’s students by 2015

9. CISB594 – Business Intelligence Strategize: Where Do We Want to Go? However, there is a possibility for problems in meeting those goals : The strategy gap – Four sources for the gap between strategy and execution: 1.Vision (viability, suitability to the organization) 2.People (are they ready?) 3.Management (do they agree?) 4.Resources (are the infrastructure ready?)

10. CISB594 – Business Intelligence Plan: How Do We Get There? Operational planning – 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 – A project plan that is designed to ensure that an organization’s strategy is achieved – Two approaches; tactic centric and budget centric

11. CISB594 – Business Intelligence Plan: How Do We Get There? Operational planning – 2 approaches: – Tactic-centric - In tactic-centric planning, the focus is on developing tactics that will meet the strategic goals. After that, the cost of implementing them is considered. If it exceeds what the organization is willing to spend, the plan can be revised. – Budget-centric plan— the focus is on developing tactics that meet financial targets.(how much is to be budgeted will be determined first). After that, the results of using them are considered. If they do not meet the organization’s strategic goals, the plan can be revised.

12. CISB594 – Business Intelligence Plan: How Do We Get There? Financial planning and budgeting – An organization’s strategic objectives 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

13. CISB594 – Business Intelligence Monitor: How Are We Doing? A comprehensive framework for monitoring performance should address two key issues: – What to monitor – How to monitor : using system that has inputs, a process for transforming the inputs into outputs, a standard or benchmark against which to compare the outputs, and a feedback channel to allow information on variances between the outputs and the standard to be communicated and acted upon

14. CISB594 – Business Intelligence Act and Adjust: What Do We Need to Do Differently ? – Managers’ creativity counts at this stage – The common problem is that management has little time to review results from a strategic perspective, decide what should be done differently, and act on the revised plans – a challenge

15. CISB594 – Business Intelligence Performance Measurement Performance measurement system (under monitoring) A system that assists managers in tracking the implementations of business strategy by comparing actual results against strategic goals and objectives The most popular system in use is the balanced scorecard (BSC) – The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives

16. CISB594 – Business Intelligence Balanced Scorecards

17. CISB594 – Business Intelligence Balanced Scorecards

18. CISB594 – Business Intelligence Example of BPM system: Performance Dashboards and Scorecards Dashboards – a dashboard is an executive information system user interface that (similar to an automobile's dashboard) is designed to be easy to read Dashboards and scorecards both provide visual displays of important information that is consolidated and arranged on a single screen so that information can be digested at a single glance and easily explored

19. Performance Dashboards

20. CISB594 – Business Intelligence Performance Dashboards Dashboards versus scorecards – Performance dashboards Visual display used to monitor operational performance – Performance scorecards Visual display used to chart progress against strategic and tactical targets CharacteristicDashboardScorecard Purpose Measures performanceCharts progress against targets Users Supervisors, specialists Executives, managers, staff Updates “Right-time” feeds Periodic snapshots DataEvents – as they happenSummaries Display Visual graphs, raw data Visual graphs, text comments

21. CISB594 – Business Intelligence Types of Performance Dashboards Three types of performance dashboards (Homework): An operational dashboard is used by frontline workers and supervisors to monitor key operational data that are lightly summarized and updated frequently throughout the day. A tactical dashboard is used by managers and analysts to track detailed and summarized data generated from departmental processes and projects on a daily or weekly basis. A strategic dashboard is used by executives, managers, and staff to monitor detailed and summarized data pertaining to the execution of strategic objectives on a monthly or quarterly basis.

22. CISB594 – Business Intelligence Performance Dashboards Dashboard design – “The fundamental challenge of dashboard design is to display all the required information on a single screen, clearly and without distraction, in a manner that can be assimilated quickly" (Few, 2005)

23. CISB594 – Business Intelligence Performance Dashboards – What to look for in a dashboard Use of visual components (e.g., charts, performance bars, sparklines, gauges, meters, stoplights) to highlight, at a glance, the data and exceptions that require action. Transparent to the user, meaning that they require minimal training and are extremely easy to use Combine data from a variety of systems into a single, summarized, unified view of the business Present a dynamic, real-world view with timely data refreshes, enabling the end user to stay up-to-date with any recent changes in the business.

24. CISB594 – Business Intelligence BPM Architecture and Applications BPM architecture – A BPM system needs three components in order to contribute to the successful implementation of strategy: 1.Database tier 2.Application tier 3.Client or user interface

25. CISB594 – Business Intelligence BPM Architecture and Applications BPM architecture – Database tier designs include: Transactional data stores Application data marts Centralized data warehouse

26. CISB594 – Business Intelligence BPM Architecture and Applications BPM architecture – BPM applications: 1.Budgeting, planning, and forecasting 2.Profitability modeling and optimization 3.Scorecard applications 4.Financial consolidation 5.Statutory and financial reporting

27. CISB594 – Business Intelligence BPM Architecture and Applications BPM architecture – BPM user interface The user interface is the bridge between the BPM applications and the end user The Web browser is currently the primary tool for accessing information in a BPM system Spreadsheets are a popular alternative when a rich user interface is needed to support the analytical and computation needs of the user BPM interfaces should provide guidance to the end user

28. CISB594 – Business Intelligence Now ask if … You are now be able to: Describe the business performance management (BPM) Explain the BPM’s closed-loop processes linking strategy to execution Describe the differences between scorecards and dashboards Describe some of the basics of dashboard design CISB594 – Business Intelligence

29. Group work today