Considering the current economic climate and fast changing business environment, operational managers are even under more pressure to generate results and optimize costs through efficient resource allocation.
The reporting rules have executives scrambling for faster, yet more detailed information about results and performance so that they can report the generated results with confidence.
The Business Intelligence and Performance Management for the 21st Century - the Ventana Research Report - concludes that BI solutions set a new trend regarding technology usage in performance management. According to the report, two thirds (66%) of organizations are planning to evaluate new technologies for BI and performance management, while the highest growth in BI [Business Intelligence] tools to support performance management has been in operations (51%), finance (50%) and customer management (49%)(Ventana Research, 2010).
Risks to consider
Before implementing a new IT solution for managing operational performance, there are several risks to consider for assuring a successful utilization:
- Low integration with other applications – if the organisation had already invested in disparate technologies from multiple vendors, it is a high risk that the applications operate with disjointed business rules and hold divergent data, so they provide organizations with multiple versions of the truth.
- Low usage of the IT solution – if the tool responds to the department’s narrow set of needs , without being integrated and aligned with the organisational set of performance management tool, it might end up to no usage.
- Ability to deliver the insight needed - the technologies are designed and implemented by IT organisations, making it difficult for operational / business unit / department managers to use it and extract the right data. As a result, they can't provide the operational and financial insights required for business improvement.
Why using technology support for performance management at operational level?
The most important roles that a support technology should have within operational performance management are:
- Operations management - the IT solution supports the operational management with regards to the processes and workflow within the department. The supporting technology is relevant to the business user by simplifying the complexity of the processes.
- Query and reporting – often the IT solution is used more than just the operational manager. Therefore, the tool should be able to cover a large volume of data for a high number of users.
- Data visualization – beyond standard query and reporting, it should deliver information in a highly interactive and visual environment.
- Analytics and business logic – the solution should be able to deliver the analysis required to predict results and enable only one version of data (Kopcke, 2003).
Software as an enabler
- Software itself does not make operational managers more effective; it just makes them more efficient.
- Operational management software does not teach users how to define targets, communicate to other departments, or make clear assignments to the employees. However, the software enables operational managers to accomplish their responsibilities more efficiently.
- Inefficiency occurs when data is presented in a way that manager struggle to make sense of and end up spending a lot of time trying to figure out what a particular report is trying to tell them (eab group, 2010).
- Kopcke, J. (2003), How BPM Technlogy Enables Better Business Performance, available at: http://bpmmag.net/mag/bpm_article_nwarcarticle_13967/ (accessed 9 September 2010)
- eab group (2010), PPPM Software selection, available at: http://www.eabgroup.com.au/en/section/technology-integration/pppm-software-selection-i49.html (accessed 9 September 2010)
- Ventana Research 2010, Business Intelligence and Performance Management for the 21st Century, available at http://intelligent-enterprise.informationweek.com/channels/business_intelligence/showArticle.jhtml;jsessionid=2KTJGT15JLV1TQE1GHPSKHWATMY32JVN?articleID=225200684&pgno=4, (accessed 09 June 2010)
- smartKPIs.com (2010), Enhancing business performance wth intelligent data visualization – Ideas from sport, smartKPIs.com Blog, available at http://www.smartkpis.com/blog/2010/06/28/enhancing-business-performance-with-intelligent-data-visualization-ideas-from-sport/
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- smartKPIs.com (2010), A periodic table of data visualization methods, smartKPIs.com Blog, available athttp://www.smartkpis.com/blog/2010/12/29/a-periodic-table-of-data-visualization-methods/, (accessed 20 January 2011)
- smartKPIs.com (2010), Intelligent data Visualization – FIFA 2010 BAlon d’Or, smartKPIs.com Blog available at http://www.smartkpis.com/blog/2011/01/10/intelligent-data-visualization-%E2%80%93-fifa-2010-balon-d%E2%80%99or/, (accessed 20 January 2011)