If you visit a stock photos website and search for images depicting “success,” you’ll find pictures of people winning awards, racecars crossing the finish line, a dart hitting a bull’s eye, students receiving graduation diplomas, people at the top of a mountain, red arrows pointing up in graphs, and similar images. They all represent the measurement of an outcome in a journey toward a goal.
I suggest that this gauge is often missing in business intelligence initiatives.
Of course businesses have aspirations for making better decisions, faster, because of the information their BI initiatives yield. But how do they know if they’re better? Compared to what? I posed these questions to the group in one of my Friday #BIWisdom tweetchats on Twitter. Measuring success requires KPIs, benchmarks and metrics, they responded.
I delved deeper:
- What BI metrics and KPIs do world-class organizations use?
- What are the sources for benchmarking?
- Is the measurement of success tied to just a particular project or is it tied to the entire enterprise BI practice?
Their tweets came rapidly:
- The metrics need to be a direct reflection of the company’s strategy and align with goals.
- The only metrics that matter are the ones that identify an impediment or threat to growth and revenue.
- Success is like a vector, so you need to measure both magnitude and direction.
But there were no responses when I asked, “Who in your opinion measures BI success well?
There are several challenges, they concluded. Most static KPIs don’t fit with an agile BI approach to data discovery. Discovery is forward looking; KPIs are rear looking.
Another problem: Leadership often does not communicate the success other than producing “pretty charts.” That communication is necessary for leading the way to future successes.
And the biggest challenge: How can businesses keep their KPIs relevant? What is relevant today may not be relevant in 18 months. What is the process for successfully evolving BI success metrics over time?
Bottom line: Organizations that don’t review the effectiveness of decisions do only half the job. Just as with BPR, BPM, JIT and TQM efforts, BI efforts demand measurement and evaluation. Otherwise it’s impossible to assess performance against goals and strategy.
I’ve heard many testimonials from companies stating that it takes real commitment to do this for business intelligence, but there is real benefit from the commitment. It starts at the top and cascades like a waterfall. It requires commitment from the entire organization at both management and operational levels.
The discipline of creating and agreeing on the metrics and aligning them to goals is probably 80 percent of the work. But that discipline leads to great value. It’s hard work and often complicated in a corporate culture. But it’s the committed who succeed at BI, and the rewards in competitive advantages can be huge.
Howard Dresner is president, founder and chief research officer at Dresner Advisory Services, LLC, an independent advisory firm. He is one of the foremost thought leaders in Business Intelligence and Performance Management, having coined the term “Business Intelligence” in 1989. He has published two books on the subject, The Performance Management Revolution — Business Results through Insight and Action, and Profiles in Performance — Business Intelligence Journeys and the Roadmap for Change. He hosts a weekly tweet chat (#BIWisdom) on Twitter each Friday. Prior to Dresner Advisory Services, Howard served as chief strategy officer at Hyperion Solutions and was a research fellow at Gartner, where he led its Business Intelligence research practice for 13 years.