The Intelligent High-Performance Organization

Developing Organizational IQ strengthens and sustains high performance

Most industry leaders are evolving data-driven organizations.  All other organizations are trying to figure out how to use data to achieve sustained high performance.  This is reflected in the strong demand for data scientists, who know statistics and are proficient coding in predictive analytics technologies across large data sets.  Interestingly, the demand for data scientists is high because there are very few internal data scientist candidates.  Organizations have been doing very little to develop employees analytic thinking abilities, which is why there is only a very small group of self-motivated people who can satisfy data science requirements. 

People can learn statistics and how to use analytics, but most of the time they become so immersed in the technologies that they have no idea what to do with it. “Give someone a hammer and everything is a nail.”  Analytics vendors sell their products by convincing prospective customers that their analytics tools can answer their questions.  That’s not exactly true.  People need to first think about what they want to know and then ask the questions and develop the answers.  This dichotomy of business people knowing the questions and technology-oriented analtyics people knowing how to develop the answers continues to cause untimely and/or bad decisions that measurably impacts enterprise performance.  What’s the solution?

Developing an intelligent organization that works collaboratively to strengthen and sustain high performance starts with a vision and a strategy!  When every employee is viewed as an intellectual asset to be nurtured and developed to maximize their value, everyone wins: customers, employees and the organization.  So, what is an intelligent organization strategy?

Leadership Intelligence

There is a rapidly rising tsunami of intelligent leaders who are looking at the long-term value of their organization’s strategy, rather than the quarterly view that has been in place for so long and exists at the detriment of organizational performance, employee growth and development and long-term shareholder value. 

The best leaders have a strategy to enable everyone in their organization to be as knowledge as possible about the organization’s business processes and outcomes, products and services, customers and competition.  Understandably, some employees will rise to the occasion, embrace the knowledge and recommend innovative changes…while most will not.  We never know where our next leaders will come from if we don’t nurture them with business knowledge and the opportunity to do something with it.

Employee Knowledge and Skills

People are hired because they have the foundation knowledge and skills to satisfy their job requirements.  As business models and processes evolve, employees must be trained to productively adapt.  When training is not provided, the best employees leave for better opportunities and all other employees impact enterprise performance with outdated knowledge and skills.

Intelligent organizations have proactive training and development strategies that extend beyond current job knowledge and skills requirements to empower all employees to think about the quality and performance (i.e., productivity and expense) metrics for their business unit.  This business-critical information, along with encouragement and mentoring to think innovatively about products, services and business processes is how intelligent organizations become and remain industry leaders.

Professional Analytics

Providing immediate access to business-critical information that supports continuous learning and decisive action across the organization is Professional Analytics goal.  Knowledge is Power!

Professional Analytics is not all about technology, but about transforming information into stakeholder value, and includes:

·         Thinking – How critical and creative thinking are required skills in intelligent organizations

·         Performance Measurement – Knowing what to measure and what not to measure enables us to stay focused on what’s important.

·         Reporting and Analytics – How to use thinking tools to maximize organizational IQ and sustained high performance

·         Visual Analytics – How a picture tells a thousand words and is the basis for storytelling with data

·         Analytics Architecture – Understanding all the work that goes on before business professionals can access and begin to use data.  This enables business professionals to have conversational knowledge with the IT-based Analytics support team that maximizes productivity for everyone.

Long-term value is realized when organizations develop a collaborative knowledgebase accessible to all employees across the organization.  The future is now – do it!

Business Analytics in Higher Education

Are Colleges and Universities satisfying student’s and employer’s analytics education needs?

A few years ago, after observing the growing analytics job market and experiencing the need for foundation analytics knowledge and skills in both IT and business communities, I began to research business analytics training programs.  I learned that analytics vendor training focuses primarily on technology product functionality; association training is largely slanted toward or presented by sponsoring vendors or consultants, who are trying to identify post-training opportunities to sell their products and services; and, college and university analytics courses are almost all taught by instructors who have little to no analytics business experience, struggle to provide practical business case examples and offer little or no hands-on skills development, so the students receive little or no career-ready skills.  With no source for unbiased, high quality analytics knowledge and skills education, it’s no surprise that the analytics job market is growing, with the average salary for business analytics professionals increasing 4.3% to $111,388 (TDWI 2015 Salary Survey).

Recently, the president of a rapidly growing healthcare software company was being interviewed and was asked, “How could universities better prepare their students for the jobs you are offering?”  He quickly replied that “universities could provide more hands-on application software and analytics courses because he can’t find any new graduates with the skills required to fill his jobs.”  His company is hiring 1,000 new employees this year.  Yes, the analytics job market is good.  Yes, I’m working on a plan to help undergraduate, graduate and working professionals learn business analytics best practices.  I'll keep you posted...

How Routines Can Sustain High Performance

How to embed performance analytics in our daily routines to maximize personal productivity

Every morning, I start my day with a glass of grapefruit juice followed by my first cup of coffee, as my wife and I make breakfast for our 12-year old son and spend some time with him before he gets on the bus for school.  I then enjoy a little quiet time – I have a lot of blessings. 

After a good right brain start to the day, I start revving up my left brain with weather.com and Google News to see what’s happening.  As my coffee starts to kick in, I check e-mail to see if any clients have any needs and/or concerns that require immediate attention.  I then go to Google Analytics to see how web site traffic is trending.  I next take a quick look at my performance dashboard, which presents current activity and outcome trends, and then I dive into my prioritized Task List activities that I defined at the end of the previous day.  I do this every day.

Over time, I’ve found this routine to be productive for me because I start with quality family time and then transition into satisfying personal information needs before analyzing business process and outcome trends, which give me the good foundation and business understanding I need to prioritize and productively address my work objectives for the day.  In a short period of time, I hit the ground running.

Many client executives have similar routines.  In contrast, I’ve found that few managers, team leaders or team members have the ability to access and analyze their individual or team activity or outcome trends.  As a result, they often lack the focus and ownership required to maximize productivity over time.  How can every employee be empowered to maximize their productivity?  Here are some ideas.

Objectives + Measurement + Competence + Motivation = Sustained High Performance

1. Define measurable business process objectives for each employee and team/department
2. Ensure all employees and managers are fully trained – knowledge and skills – to do their jobs
3. Measure individual and team/department activities and outcomes
4. Ensure managers/team leaders function as encouraging coaches and mentors
5. Provide daily or weekly performance feedback with employee and team scorecards
6. Celebrate/recognize employees and teams who excel at achievement
7. Provide modest rewards, e.g., dining gift certificates, sports tickets, etc. for achievement
8. Identify low performing employees and teams as needing training and development
9. Develop routines for continuous improvement
10. Be thankful and appreciate everything you have

If we think of every employee as being in business for themselves, then they need business objectives and the ability to measure what they do to achieve those objectives. Daily feedback may be a challenge, but technology has certainly advanced to provide this capability.  Weekly feedback may be more appropriate in some cases.  Monthly feedback is the executive financial cycle, however, it doesn’t enable employees and teams to make necessary and timely adjustments.  Help employees make a difference every day.

Research and experience has revealed that simply providing performance feedback to employees generates a significant productivity increase. Executive leadership is beginning to recognize the value of providing timely enterprise performance feedback.  With a management culture of positive coaching and mentoring, rather than criticism and subordination, along with rewards and recognition for achievement, you’ll be surprised at how quality, productivity and expense metrics will grow stronger.

Performance Scorecards

The right tool for the job

A few years ago, I was asked by an industry leading technology firm to conduct an Assessment about how their Analytics program might be enhanced to best support performance improvement.  The Chief Operating Officer was not sure that their reporting and analytics deliverables presented an accurate picture of each division’s growth and profitability in their “matrix management” organization, which focused on cross-division product lines and market segments.

With executive sponsorship, we collected, integrated and analyzed all financial, sales and operations information for the prior three years.  I presented the analysis to the executive committee, including the COO and all division heads. One of the smaller, but more innovative product divisions was identified as the fastest growing business unit with the highest profit margin, while products developed by one of the largest divisions – managed by a high profile executive – was found to be losing revenue and market share. The results surprised everyone.

The presentation concluded with the recommendation to implement individual product and division scorecards that included customer satisfaction, employee satisfaction, revenue, profit margin and market share.  They all agreed that more focused scorecards would help everyone stay current with what was important, rather than just monthly high level results.

We proceeded to develop and implement the product and division scorecards, reflecting targeted objectives and actual results, which produced an immediate improvement in quality, productivity and expense management.  The Scorecards were summarized and included in Executive Dashboards, along with other reports and analytics.  The Executive Dashboards were used as templates to develop personalized, auto-generated Dashboards for business unit managers and product development teams.  Everyone now has immediate access to current performance information.  The Executive Committee agreed that business unit scorecards are the right tool for the job.

This story is an example of how most organizations – even the largest – are still learning how to use Analytics to measure, communicate and manage performance.  The main reason is that managing performance is a business accountability, and most business leaders – including IT executives – are just starting to learn about how Analytics can support performance improvement.

Since we’re only discussing Scorecards, let’s take a moment to address the differences between dashboards and scorecards.

• Scorecards – A list of business objectives for individuals, teams, and business units with measurable targeted and actual results for specific periods of time.
• Dashboards – Organized views of information, personalized for each individual based on their role and business objectives that may include scorecards, as well as summarized visual and numeric information with the ability to drill down to more detailed information.

From a technology perspective, scorecards are reports that can be included in dashboards.  Just because there is a scorecard, however, does not make the scorecard the right tool for the job.  Accurate, relevant information presented in a timely manner are requirements.  Most importantly, performance scorecards should be the foundation for identifying opportunities for continuous improvement through employee and team knowledge and skills development.  Unfortunately, this is often an afterthought, as scorecards are most often used for incentive plans.  While rewards and recognition programs are good for maintaining focus and motivation, using scorecards to analyze performance deficits at the most granular level will reveal targets of opportunity to continuously improve individual, team and business unit performance.

Scorecards present different information for each level in the organization.

• Executive – Results Only: financial and units by product/service, location, line of business, market and others.  Only address what happens – rarely why it happens.  Usually delivered monthly after books close, and quarterly in preparation for shareholder announcement.
• Management – Business Unit financial results and operating metrics. Presents what happened and occasionally why it happened, depending on BU management level and performance measurement sophistication.  Usually delivered monthly, unless exception reporting generates mid-month report.
• Team – Team financial results and business process metrics. Baseline quality, productivity and cost metrics tell the story of an organization’s performance.  While daily feedback is optimum and weekly is reasonable, many organizations provide monthly reports that include very little useful information.  Most organizations have the ability to capture business process data and develop automated daily or weekly scorecard reports, but don’t recognize that there is a direct correlation between basic organization quality, productivity and expense management…and growth and profitability.

On a recent project with a large, global information technology conglomerate, we were asked to lead a project to develop an enterprise data warehouse to replace the 1,600 spreadsheets that were used across all thirty-three lines of business, with data coming from Finance, Sales, Marketing, HR and R&D.  In addition, we were asked to develop performance scorecards for R&D, so the product development teams could have better information to stay current with their progress against their timeline objectives.

It seemed like an overwhelming task, but when we started analyzing reporting requirements and mapping the various data sources, the data warehouse architecture of conformed dimensions and fact tables emerged much more quickly than anticipated.  In the process, redundant reports across business units were consolidated and with BU-specific security profiles, producing a rather small library of standard reports with prompts that replaced thousands of redundant BU reports. Hundreds of thousands of dollars in wasted time was saved.

Through the process, the Finance, HR and R&D project management data was integrated and maintained in the R&D Data Mart.  From there, it was a rather straightforward process to prepare Product Development Team Scorecards that provided product development performance insight via near real-time reporting, while saving significant time and expense. HUGE Analytics ROI!  HUGE!!!

Many times, the short term Analytics benefit is measurable savings from eliminating spreadsheet development and deployment.  The long term benefit is increasing organization IQ to reduce the insight to action cycle-time. 

People love to play games and are naturally competitive, so when employees have timely feedback about how they’re doing compared to others, work becomes fun, more meaningful and more productive.  How are you helping your employees measure the quality, productivity and cost of their work?  How are you measuring yours?

Performance Measurement

“If you can't measure it, you can't improve it.” – Peter Drucker

A few years ago, I decided that I was working all of the time and ignoring my health. I wanted to get down to what I weighed in college.  I wanted to keep it off, rather than losing it and gaining it back…so, I knew I had to make some changes.

As a performance measurement evangelist, I developed a simple chart to record my daily weight, diet and exercise, and kept if next to a new scale.  Every morning I would weigh myself and write it down.  Every night before going to bed, I would weigh myself and write it down, as well as what I did for exercise and a summary of what I ate, if it was beyond my normal intake.  I prepared a new sheet for each month, of course with time-series spark-line and bullet chart graphs.

I was surprised when I achieved my goal in only a few months.  What I learned was that by reminding myself in the morning and at night what I ate and how I exercised – or didn’t, I was able to hold myself accountable to achieve the goal I set for myself.  The simple introduction of timely performance feedback was all I needed.  I stopped maintaining my scorecard after about 1.5 years because I had achieved my goals and adopted the nutrition and exercise habits that help me stay healthy.  Discounting Thanksgiving and Christmas holidays, I’m about back to my target weight. J

I share this experience with you because I’ve seen similar progress happen when organizations start measuring business activities as they work to achieve a business objective.  Here’s what happens:

1.       There is an initial spike in process and outcome improvement, as employees learn that their work is being measured and everyone can see how they’re doing, compared to their peers and people in other locations. 

2.       Next, performance feedback is used to identify, prioritize and resolve performance deficits in processes that directly contribute to achieving targeted objectives.

3.       Finally, performance feedback helps team leaders and management identify opportunities for employees to receive knowledge and skills training, so they can continuously improve the quality, productivity and expense aspects of their work. 

Performance goals and measures constantly evolve as the organization and market change, and new information brings new insights providing guidance on how to most productively address those changes.

Because many of my clients are banks, let’s use the example of Customer Service Reps (CSRs) having the goal of opening ‘n’ New Accounts per month.  What might be the CSR’s activities that generate new accounts to enable them to achieve their goal?  Measuring the calls, personal contacts, referrals, e-mail messages and other current and prospective customer “touches,” paints a picture of CSR productivity and effectiveness.  Considering the differences in tenure, training, and other personal attributes, the content and quality of the customer/prospect contact can be assessed to identify opportunities for motivation, knowledge and skills development.  Continuous improvement produces high performance.

My own continuous improvement journey has lead me to discover and explore the teachings of Stacey Barr and Bob Behn, who both present good knowledge and guidance on how to maximize organizational performance with performance measurement.

Stacey Barr, the Performance Measure Specialist

Performance Analytics requires well-defined performance measures.  I recently discovered Stacey Barr, the Performance Measure Specialist, who lives in Australia, and has defined a process for developing and implementing performance measures.

I invite you to explore Stacey’s PuMP Performance Measure Blueprint Program.

Developing performance measures to guide continuous improvement throughout the organization is the goal.  Analytics provide timely, cost-effective performance feedback to contribute to achieving this goal.

Bob Behn, Senior Lecturer in Public Policy at the Harvard Kennedy School

Bob focuses his research, teaching, and thinking on the leadership challenge of improving the performance of public agencies: Performance Measurement, Management and Leadership.  As I’ve learned, however, the principles and practices that Bob presents are totally applicable to all public and private organizations. 

Bob presents his ideas on The Behn Report, where he examines “…the issues, dilemmas, challenges, and opportunities for improving performance and producing real results.”  While I have enjoyed reading all of Bob’s papers, the following extract from his November 2013 paper addresses what I believe are the key topics related to Performance Analytics.

There is, however, a significant difference between doing the measurement and doing the management. Furthermore, there is also an important difference between doing the management tasks and exercising real performance leadership. These differences are reflected in the operational questions that each ask:

For performance measurement, the operational question is: How can we measure what we are doing?

For performance management, the operational question is: What are our more significant “performance deficits,” and what is our strategy for eliminating or mitigating a few of the most important ones?

For performance leadership, the operational question is: How do we motivate everyone in our organization —and our collaborators, too —to pursue our strategy with intelligence, creativity, and persistence, and thus to eliminate these few important performance deficits?

Bob’s questions assume that organizations have the Analytics technologies and processes in place to capture performance measurement data, organize and analyze the data, and provide timely performance feedback across the organization…which is not always the case.  In addition, are organization’s leaders trained to use performance feedback to understand where employees need training and development to address performance deficits?

Sustained high performance requires effective performance measurement, management and leadership supported by an enterprise Performance Analytics program. 

Progress is being made, but there is still much to do.

Analytics ROI

How to Measure and Maximize Analytics Value

A few months ago, I called a friend and former banking client, who is now the Chief Operating Officer, to discuss his experiences as an Adjunct Professor at a Boston-area university where I will soon begin teaching a Business Analytics Certification Program for working professionals, and a new MS Business Analytics program for graduate students.  We reviewed my questions about the university, and then he asked if I would meet with him and his CIO to discuss how they wanted to get their Business Analytics program back on track.  In our meeting the following week, I listened to them describe their reporting challenges and how they wanted to update their reporting platform.

When I asked them how they planned to measure the business value of the changes they desired, they looked at me like I had two heads. I told them that an investment in an Analytics initiative that directly supported strategic objectives and provided a measurable return on investment would generate a high return on investment (ROI), which would strengthen their bank’s growth and profitability.  The following is a summary of the information I shared with them about Analytics ROI.

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Analytics ROI is directly related to how an organization perceives their Business Analytics program. Is Analytics an Asset or an Expense?  When Analytics (i.e., reporting platform, tools and processes) are considered an expense, reporting infrastructure, tools and training are minimized, there is no Enterprise Analytics Roadmap, and each line of business and department is left on their own to use application-specific reports and MS Excel for operations reporting.  The result: report development and deployment time and expenses will be high, the information to action cycle will be long and Analytics ROI will be low. 

When Analytics is viewed as an asset, organizations develop an Analytics Roadmap that serves as a guide to optimize operations reporting and performance analytics by integrating data sources, applying data governance to standardize terms, and training business users to access information, answer questions and gain new insight into organizational processes, markets and industries.  The result: high Analytics ROI.

The following are summaries and links to Analytics ROI white papers from independent research firms.

NUCLEUS Research

Boston-based NUCLEUS Research conducted surveys in 2011 and 2014 on Analytics ROI.  Their research revealed that in 2011, the average return on every Analytics dollar invested was $10.66.  The 2014 research project revealed that the return has increased to $13.01 for every Analytics dollar invested.

A 2012 Analytics survey revealed that as Analytics mature over four stages, ROI progressively increases:

Initial Stage 1         188% Avg ROI      Automating Reports

Tactical Stage 2      389% Avg ROI     Leverage Analytics to improve decision making

Strategic Phase 3    968% Avg ROI     Analytics strategically aligned; fully deployed

Predictive Phase 4  1,209% Avg ROI  Analytics extended to partner and social media

Accenture

Analytics in Action: Breakthroughs and Barriers on the Journey to ROI is an excellent report based on survey data from 600 director-level executives and managers of organizations with more than 1,000 employees in the US and UK.  Very readable – good information.

The report summarized three most common reasons why Analytics project fail:

1. Measuring the Wrong Metrics: Companies are measuring the wrong things or have gaps in the way they are measuring (e.g. around the customer experience).
2. Flawed Insights: Users are not identifying and validating cross-functionally the correct insights and associated actions suggested.
3. Faulty Execution: Companies fail to embed analytical insights in key decision processes across the enterprise so that analytics capabilities are linked to business outcomes.

Clear Measures

The very good white paper, How to calculate ROI when investing in a Business Intelligence / Data Analytics Project by John Bostick, includes several excellent points about maximizing Analytics ROI.  First, it identifies five of the most common reasons for Analytics project failure:

1.       Wrong Sponsorship

2.       Treating the initiative as a discrete project

3.       Lack of education

4.       Change in Business or IT Leadership

5.       Believing you are finished

There are good descriptions of each reason that you can read in the report. 

The other point in the report that I like addresses the requirement for strategic initiatives to be defined with summary tasks and an estimate of the calculated expense reduction and/or productivity/revenue gain expected to be achieved.  Here is the example:

Improve potency of commercial customer leads. Tradition field marketing including canvassing, direct mail, telemarketing, and community relations has seen a recent decrease in productivity for gaining new clients for the bank. New methods are needed.

a.       Current “hit” rate is approximately 2 out of 53 “cold” calls.

b.      Create profile of prospective clients most likely to buy commercial services and use profile to create more “receptive” cold call leads.

c.       Improving the appointment rate from 2 to 2.3 (15% increase) would generate 125 new clients company-wide which will result in $324,000 in annual additional revenue.

In addition to motivation to make more contacts, what employee knowledge and skills development might be needed?  A focus on improving business activities generates desired business results.

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BI Analytics ROI Template

The BI Analytics Team has developed and refined an Analytics ROI model over the years.  Calculating Analytics ROI aggregates the short-term resource time and expense reduction for developing and deploying reports, and the longer-term revenue gains and expense reductions from performance analytics being used to streamline business processes and identify opportunities for growth.  The BI Analytics ROI template can be downloaded with this link.

When all SBUs and LoBs are included, and when the actual revenue gains and expense reductions are recorded, the Analytics ROI will be much greater…as the independent surveys confirmed.  Powerful!

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My client now understands the potential of Analytics to directly and measurably strengthen performance.  I agreed to conduct a Performance Analytics Assessment for their bank, which provides not only an Analytics ROI Calculation, but also a Performance Analytics Roadmap to achieve their objectives.  2015 is going to be a very good year for my client.

Life is good!

The 9 Step Performance Analytics Roadmap

“If you don't know where you are going, you'll end up someplace else.” ― Yogi Berra

The BI Performance Analytics Roadmap is a guide to help clients develop a Business Analytics vision and plan to measurably optimize business processes and strengthen operating results.

The gap between Business Analytics functionality and utilization continues to grow.  Most organizations purchase reporting tools from their core system/ERP vendors, which typically include a standard reports library…but not a vision for how Analytics can be used to optimize business processes and strengthen performance.  Without a vision for how Analytics can empower an organization, there can be no plan.  Without a plan that measures how Analytics can strengthen operating performance, IT developed reports are given to business users, who usually use them to extract data to populate spreadsheets.  The potentially high Analytics ROI degrades into an IT expense to be minimized. An Analytics vision and plan are needed!

 “Where there is no vision, the people perish…” – Proverbs 29:18

So, how do the top 20% of high performing companies use Analytics?  They start with a vision.  They think of their organizations as high performance engines with sensors (e.g., performance metrics) to ensure all of the moving parts are working at peak efficiency.  All of the moving parts – every team, department and division – are monitored to provide them with timely performance feedback, so they can learn – with the right coaching/management/mentoring, as well as motivating rewards and recognition – how to best manage their business processes to optimize performance.

The Performance Analytics Roadmap includes the following steps:

1. Strategic Initiatives – The first step in defining your Performance Analytics Roadmap is to identify the strategic initiatives throughout the organization that achieve strategic objectives.
2. Performance Measures – The next step in developing your Performance Analytics Roadmap is to make sure the strategic initiatives include measurable performance metrics for both business processes and targeted outcomes.
3. Rewards and Recognition Programs – Cash and non-cash incentives, as well as recognition of individual and team performance achievement, are highly effective tools for helping employees take ownership of organization objectives.
4. Scorecards – Performance feedback is a foundation best practice that empowers employees to understand where they can improve their individual/team/department performance.
5. Dashboards – Dashboard design is an art and a science, employing visual analytics with summary information linked to progressively more detailed information, to keep employees informed about what they need to know to continue learning and focus on maximizing productivity.
6. Reporting and Analytics – Reports and analytics are questions answered, which are learning experiences that lead to more questions answered – continuous learning – that produce better, faster decisions. When focused on performance improvement, good things happen.
7. Business User Self Service – A key to sustained high performance is to empower business users with the ability to access information and quickly develop answers to their own questions.
8. Security Profiles – Enabling business user self-service, security profiles keep business users focused on relevant information, while restricting access to proprietary information.
9. Data – Nothing is possible without data sourcing, integration, governance and architecture to provide current, accurate, comprehensive, organized data.

I wanted to briefly summarize each Business Analytics component that contributes to strengthening organizational performance.  I will write more about each one in the coming weeks.

What do you think is the most challenging component of a Performance Analytics capability?

Performance Analytics Architecture

I tell clients and students that technology can do whatever you want…if you know what you want.  While knowing what you want – the questions you want answered – is the first and most important step, preparing the information to answer those questions is 90% of the work.  The good news is that you don’t have to “boil the ocean” to get started.  Like building anything of quality, the architect must know what it’s going to be when it’s finished, so everything developed and delivered builds on what has already been developed to further leverage the Analytics investment.

It’s really logical when the process is considered:

1. Decisive action is enabled by questions answered – the right information at the right time.
2. Questions are answered by business people using Analytics tools
3. Analytic tools require organized information that is current, consistent and accurate.
4. Organized information is develop by integrating data from inside and outside the organization.

Let’s expand on this simple process with a little reality.  In most organizations, business users don’t drive Analytics initiatives, so reporting projects become long and expensive because the technology team may not have a good understanding of the business questions that need to be answered, so they work to answer every possible question, i.e., “boil the ocean.”  In the process:

1. The business user communities don’t have control or much participation in the process, so they don’t feel ownership of the Analytics deliverables.  “It’s another IT initiative.”
2. Report requests must be submitted to the IT group, where a report development backlog grows, making business users frustrated with IT, so they continue using spreadsheet reports with inconsistent data definitions and calculations.
3. Information (i.e., reports and analytic deliverables) are “pushed” to business users who don’t understand the information or how to access the data to develop answers to their real questions.
4. Management receives untimely (i.e., monthly) historical reports with marginal information, allowing opportunities to pass and problems to grow.
5. Calculations and terms are not defined consistently across all business units causing confusion and arguments in management meetings about which report is right.
6. Incomplete information from a single application data source provides possibly misleading customer and product segmentation and behavior profiles, which leads to inaccurate analyses and bad decisions.
7. …and the list goes on.

Providing business users with immediate access to relevant, accurate, consistent business information is the requirement.  While Analytics Initiatives are guided by a continuous stream of increasingly insightful questions from across the organization that build on answers to previous questions, the foundation performance analytics architecture must be planned and in place to maximize an organization’s return on intellectual assets.  The architecture includes:

1.      Enterprise Data Warehouse Architecture

In a perfect world, this is an enterprise data warehouse (EDW) architecture with all of the key components.  In reality, there are a lot of “variations on a theme.”  It doesn’t happen at once, but having the vision of the model will lead to making fewer mistakes.

Automating and iteratively tuning the model and processes as analytic requirements evolve provides a high return on investment.

2.      Extract, Transfer and Load (ETL) Processes

Extracting the application system data required to answer questions, and then transferring it to a staging database, and then converting/standardizing the various data types and definitions as it is consolidated and loaded into the EDW and then on to the functional data marts is a complex, but necessary process to establish a single source for enterprise analytics.  An understanding of the desired data model and data types makes the process a lot easier. Automating the process makes it fast, invisible and cost effective.  This is a good thing.

3.      Data Governance

The most challenging part of the process is getting lines of business and strategic business units to 1) share their data and 2) agree on a common dictionary of terms and calculations. This is why all successful Analytics Programs are sponsored by senior executives.

4.      Data Marts

Functional data marts provide the control, security and perspective to maximize business user information access and productivity.  Access to everything, when security isn’t an issued, will be overwhelming to business users, who need to focus on their business objectives, rather than everything that is going on in the world.  Defining the data requirements and automating the ETL update processes makes data marts a very productive platform.

5.      Security

Security profiles make business user self-service possible.  When individual and team performance scorecards are employed, secure access to performance dashboards that are updated daily is an incredibly productive consideration.  Do it!

6.      Analytics Tools

“How do I love thee?  Let me count the ways!”  Sorry for waxing poetic a little, but I’ve been lovin’ reporting and analytic tools for many years…and I still do.  They are the answer to my questions…and yours.  I used Pilot Software, IBI Focus and IRI Express when I started in 1990.  I’ve been a Cognos Partner since 1995, a Microsoft Partner since 2001, recently designed and developed a Business Objects-based enterprise reporting platform for a $13B global technology client, and taught Visual Analytics at a large New England University, featuring Tableau and QlikView.

The good news is that they have become a commodity – they can all, basically, do the same thing.  There are new ‘data discovery’ tools, like QlikView, Tableau and others, who have very good visual capabilities, but it all goes back to: “What do we want to know?”

It’s interesting that the top 3 vendors in Gartner’s 2014 Business Intelligence and Analytics Magic Quadrant are Microsoft, Tableau and QlikView, the latter two being relative newcomers to the game.  But they’re all good, depending on the questions that need to be answered.  The really interesting thing is that the Microsoft BI platform is not being marketed as a business user platform…when it’s an excellent and very cost-effective reporting and analytics capability.  More on this another time…

7.      Analytics Library

Redundant report development is more of a problem than using spreadsheets.  While trying to answer the same question, but using variations in data and presentation graphics, most organizations have many reports that answer the same question.  An Analytics Library helps organizations improve productivity and save time and expense by not recreating the wheel (i.e., developing a new report to answer the same question).

8.      Business User Self Service

This is where the rubber meets the road.  Reporting and analytics is not an IT initiative – it’s a business initiative that empowers everyone in the organization to make the best possible decisions regarding customer, product and employee processes…which result in optimized quality, productivity and expense management outcomes.  Providing business users to access information that provides them with a context to understand how each of their jobs contributes to the success of the organization is HUGE!

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This is a journey with a changing destination.  As dynamic business requirements change, so do Analytic requirements.  Using an architecture that anticipates and accommodates these changes will save a lot of time and expense, while increasing Organization IQ and shareholder value.

Think about it. 

What questions do you have?

Banking Performance Programs

For the last 10-12 years, much of my work has been with mid-market banks.  The corporate culture of most banks, especially mid-market banks, is based on tradition and a history of personal relationships with customers. Many banks were founded by the grandfather or great-grandfather of the current President, so banking is the family business. There is great pride in having served customers for over 100 years. It is no surprise then, considering how the economic crisis imposed dramatic changes on the banking financial model, that traditional business processes and behaviors are not producing desired – required – results. What will it take to help mid-market banks survive and prosper through this challenging period?

Consider how leading companies in other industries produce sustained high performance. Most start with a formal Strategy Statement with Vision, Mission and Value Statements, and then develop a plan to fulfill the strategy. The plan is usually based on a performance model, like the Balanced Scorecard, Six Sigma, Economic Value Added, and other models. We can say, “That doesn’t apply to us,” or “Only the big companies can do that.” But it does apply to mid-market banks, especially when a good plan and solid execution are required for survival.

A growing number of banks are beginning to use some form of a Balance Scorecard as the basis for developing plans and measuring leading and lagging performance indicators. Lagging indicators are the results we want to see: EPS, Account Growth, Net Income, Asset Growth, etc. These metrics are directly impacted by leading indicators, the business processes that nurture and produce the  lagging indicators of growth and profitability. Leading indicators include, but are not limited to: Customer Contacts (e.g., calls, letters, events and meetings), Customer Satisfaction, Associate Satisfaction, Account Attrition Rate and others.

It is an iterative process to define strategically aligned goals and objectives, implement strategic initiatives with business process and outcome metrics, measure activity, analyze results, make adjustments, set new goals and re-execute the plan. If we do this annually, we will all be long dead before any real progress is achieved. Performance Management must be ongoing. Leading Performance Indicators must be measured daily and analyzed weekly to maintain high productivity. Lagging indicators are traditionally measured monthly.

Rather than try to put all my thought into a single message, I’ll submit this for your consideration, and submit additional thoughts about Banking Performance Programs - and Banking Performance Analytics - in subsequent messages.

Comments and challenges are invited and encouraged.

“If the laws are not observed, rogues and scoundrels can present themselves as perfectly normal. If standards of performance are not observed, incompetents and mediocrities can present themselves as stars." – R. Emmett Tyrrell

Introduction to Performance Analytics

After beginning my professional life in Human Resources, I was drawn into a highly productive period in the Applications Software industry, where I saw "the promise of technology" in Executive Information Systems, and founded Business Intelligence, Inc. in 1990.  I am truly blessed to love my work.

While staying current with analytics business processes and technologies requires an ongoing commitment, I have enjoyed learning about and working with data warehouse, reporting and analytics. For years, I have been reluctant to share what I've learned because I've always maintained the perspective of a student.  With the market demand growing for business analytics knowledge and skills, however, I've been encouraged to start sharing what I have learned - and continue to learn.

My plan is to present what I refer to as Foundation Performance Analytics Best Practices.  Having worked with most of the major database platforms and almost all of the major business intelligence vendor tools, I will focus on how analytics can be used to provide the greatest value to enable performance-minded organizations to achieve sustained high performance.  It's more about how technology can be used, rather than just about analytics functionality.

The information will be presented with an invitation for comments, questions and recommendations.  Others seasoned business performance and analytics practioners will be invited to share their thoughs for your review and consideration.  No one person can know it all.  I will always be a student of performance analytics, and with your input, will continue to learn.

Welcome to my world.