Transcript Slide 1

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)
University of Nevada, Reno
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Business Performance Management1
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.
University of Nevada, Reno
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Business Performance Management2
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
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Strategize
Plan
Monitor/Analyze
Act/Adjust
University of Nevada, Reno
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Business Performance Management
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.
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Tasks in the Strategic Planning Process
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Conduct a current situation analysis
Determine the planning horizon
Conduct an environmental scan
Identify critical success factors
Complete a gap analysis
Create a strategic vision
Develop a business strategy
Identify strategic objectives and goals
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Components of a strategy
 Strategic vision
A 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).
University of Nevada, Reno
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Business Performance Management
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
University of Nevada, Reno
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Business Performance Management
Monitor: How are we doing?
 Performance measurement system
A 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.
University of Nevada, Reno
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Business Performance Management
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
University of Nevada, Reno
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Business Performance Management
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
Financial
How should we
appear to our
shareholders?
Customer
How should we
appear to our
customers?
Vision and
Strategy
Internal Business
Process
What must we excel
at?
Learning & Growth
How will we sustain
our ability to change
& improve?
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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!
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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.
University of Nevada, Reno
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Business Performance Management
BPM “architecture”
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So, where does
Business Intelligence
fit in relation to
Business Performance
Management?
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