One of the main tools for evaluating the implementation of a strategy in an organization is the assessment of business performance and its comparison with formulated objectives. Dashboard technology was developed to facilitate this task. “Dashboards” bring all the information to the manager’s computer screen to reflect business performance relative to formulated goals in a convenient graphical presentation. The following article describes how dashboards can serve as a basis for the actual implementation of organizational strategies.
By Boaz Godovich, manager of the BI field in the Matrix Software Products division
For an organization to achieve its goals in a modern economic environment it is not enough to develop a good business strategy. According to a study conducted by Fortune magazine, less than 10% of good organizational strategies are successfully implemented. Another study by Fortune shows that when general managers fail, in over 70% of cases they don’t blame the strategy but rather its practical implementation.
Quantitative follow-up and analysis of activities are efficient tools in strategy implementation
Organizations look for new methods and means of improving their chances of implementing the strategies they develop. Quantitative follow-up and analysis of business activities has proved to be an efficient method for the implantation of company strategy.
After the organization defines the indicators important for the success of the strategy, sets the required performance levels, and the weight of each component of success required by these processes for every branch or department in the organization, it becomes possible to check whether formulated goals match actual results.
These examinations are carried out within the framework of the Business Performance Management (BPM) methodology. This process translates the organizational strategy into measurable goals and targets. The BPM method is based on determining by means of a basket of performance indicators -- Key Performance Indicators (KPIs) -- which factors improve the business results of the organization.
The Dashboard is a central component, instrumental for examining business performance in every field and department and for comparing it to formulated goals. Similar to a dashboard in a car, a dashboard in an organization provides managers with a graphic presentation, for example, of the cash flow status – whether it is good adequate, average, or problematic. A different dashboard can show whether the sales for the current quarter are at the predicted level needed for achieving the organization’s goals.
Dashboards can convert business strategies from theory into practice by creating a synergy of cooperation between the various groups in the organization:
Streamlining. Organization managers can use dashboards to identify the business goals and channel the resources and efforts toward achieving the business goals that were agreed upon by means of the KPIs.
Visibility. With the help of dashboards the company can follow up and analyze the specified KPIs that are suitable not only for separate departments or units within the organization, but are fully applicable throughout the organization. The option of viewing the data concerning the other departments helps increase positive intra-organizational competitiveness.
Information sharing. A dashboard provides the organization with a single, unified vantage point of the formulated business goals. Unified data enables shared decision making with full cooperation and understanding of employees, partners, and suppliers.
Concern for user needs. Dashboards are designed for the optimal satisfaction of the needs of users within the organization. Everybody in the organization, from senior management and to the employees in various departments can use the dashboard to further improve their business performance.
The dashboards are built as follows:
Intuitiveness. The dashboard is a multicolor graphic presentation in which green areas represent good results, yellow represents mediocre results, and red areas represent results especially low or dangerous for the organization. Additional graphs represent trends and directions. Dashboards are easy to understand, so that users can learn how to use the system quickly.
Personalization. Dashboards can provide the various users with performance indicators specific for them and relevant to areas they need to monitor. The intra-net interface allows building a suitable home page for every manager.
Strong interactive vantage point. Using a set of rules and warnings, and with the help of advanced analytical capabilities, managers can control the business in real time.
Concern for the needs of the IT department. The information technology (IT) department of the organization works with the systems that provide users with the advanced tools required for offering a high level of service at a low costs of maintenance and repairs.
The Dashboard technology is based on:
Fast implementation and deployment. Unlike other software systems installed in the past, the installation of the Dashboard shows return on investment (ROI) quickly, within months as opposed to years. To achieve this goal, it is essential to build a framework for development and deployment that does not require extensive programming.
Utilization of existing infrastructure. The Dashboard allows utilizing the investment in existing systems such as ERP, CRM, databases, and data warehouses, and provide a unified, easy to grasp presentation of the data stored in these and additional systems.
Part of the organizational Business Intelligence strategy. Combination with existing BI systems enables the organization to provide users with analysis and wider reporting options, drill-down and drill-through options, and more.
Managerial dashboards are increasingly becoming part of management work.
Below are two examples of prominent companies using these tools.
Mastercard. Mastercard uses dashboards to enable company managers to monitor the performance indicators (KPIs) in areas of their responsibility. In addition, for companies that use its clearance services, Mastercard offers access by extranet to the business performance intelligence system that enables them to view the data on operational performance of the business in order to enhance business performance and increase revenues. Banks and financial organizations that work with Mastercard can see how fast they approve loans and the extent of fraud taking place at the bank.
Business Objects. The company, which is active in the BI field, proved that the adage “the cobbler has no shoes” is wrong in its case. The company proved that the Dashboard Manager tool it developed clearly helped it consolidate its market share, increase sales, and increase revenues. In the course of Q3 2003 the company’s sales and marketing teams started using this model to improve sales forecasting and efficiency. In the past, every sales manager used to have a different system for following up on leads and for projecting revenues for the quarter. Today, with the help of the Dashboard every senior sales manager in the organization receives a picture of daily activities and has the option to perform an in-depth study of specific indicators. In addition, Dashboard Manager helps present the organizational goals in a form that helps users manage their activities. Over 50 different dashboards have been developed for various levels and positions at Business Objects itself. Sales managers are now more responsible for their sales pipeline and for the number of deals they close every quarter, having insight necessary to identify potential problems before they actually occur and to carry out the required corrective actions. The difference is felt in the marketing department as well; because of better insight into the state of the sales pipeline, the marketing team can plan the steps needed to build up the pipeline with lead generation programs, and can determine where it is possible to reduce these programs.
Conclusion
To achieve their goals, smart organizations must streamline their business and organizational goals. Use of data and the analytical operations enable the organizations to meet their objectives. Organizations that efficiently implement the dashboards and performance management methodology gain access to tools that enable them to measure and further enhance their business results.