Properly implemented technological tools can increase quality and efficiency while reducing expense.
Each year, businesses make significant investments to collect and capture more information about their clients, sales, products, suppliers and even themselves to gain an edge over their competitors. These efforts, while derived from a thirst for knowledge, often produce large quantities of unusable data. They lack true insight unless a solid framework is put in place to organize, report on and analyze it.
That has led many CIOs and CFOs to declare such projects failures, and to lessen their funding and focus on them. This can lead to frustration within the business because of the continued inability to make better decisions by utilizing data and actionable information.
Over time, many organizations decide to try again, fueled by increasing market pressures and the need to improve margins and control costs. These programs are helped by the arrival of more affordable and accessible corporate performance management (CPM), business intelligence (BI) and data warehousing solutions. But these solutions, though cheaper and faster to deploy than ever, will produce the same results as their predecessors if time is not taken to implement the correct analytical framework in which to view the data.
Closing the Data Gap
Several damaging effects can occur by not obtaining the optimal value from your systems and activities. Aside from the basic loss of time and energy spent per user, as well as the loss of your investment in the system itself, company growth can also suffer. You must know what verticals or products to focus energy on and how to target price points and manage cost reduction programs. There must be a fundamental understanding of where profitability exists, and how those successes can be leveraged throughout your organization.
The strategy, objectives and measurement framework are often overlooked when running CPM, data integration or reporting analytics projects. Frequently, companies attempt to automate what they have, instead of stepping back and evaluating whether they possess the right information to make informed, fact-based decisions around their strategic objectives.
This gap between raw and actionable data can be closed by beginning these types of projects with a strategic business assessment and understanding. One of the first steps to an integrated road map is to outline the organization’s strategic objectives and identify the performance indicators needed to measure success. The goal is to understand your specific financial and operational metrics, drivers and targets that produce results.
These metrics and drivers provide organizations with quantifiable data to effectively measure whether you are achieving your objectives. For example, if a company has the goal of being the second-largest servicer in its industry, a target measure might be a market share indicator. Customer retention should be tracked and targeted for improvement, as well as net new clients added. Those new clients would be tracked throughout the year as progress toward the strategic objective of accomplishing that market share goal.
Align Metrics & Measures
For most companies, the metrics that drive business decisions come from a variety of different systems, making it difficult and time-consuming to piece together the correct information to make better and more informed decisions. To track customer metrics, data may come from a customer relationship management (CRM) system, while the order information may be in an enterprise resource planning (ERP) system. By pulling these different subsets of data together and integrating them into one system, a richer platform is created to enable better decision making.
Through a well-planned implementation of a BI or CPM program within your organization, the efficiency and quality of enterprise reporting, advanced analytics, strategic planning and forecasting, and other reporting and financial processes can be increased. However, the true value of these initiatives can only be realized when appropriate time is spent to thoughtfully detail the strategic, analytical design and outcomes desired from the system.
By following a structured methodology focused on aligning your metrics and measures to specific objectives, it is possible to provide clean, consistent and accurate information to key stakeholders. This improves decision making and offers better insight into business activities, while reducing overhead costs from the IT, finance and reporting perspectives.
Some believe that simply throwing technology at the problem is the answer, but that’s not the optimal solution, nor will it solve the fundamental issue. The role of technology is to automate this process and reduce the manual resources and costs associated, providing a mechanism to ensure data is validated, consistent and accurate on a monthly basis. But it does not by itself strategically align an organization’s information and analytic needs to the decision framework and analytic needs.
The current software market is rich with tools to help pull, integrate, store and present data from multiple systems. Many are tailored to unique verticals or industries, while others are fully customizable to the specific details of your individual business.
Each tool, when implemented correctly, provides a transparent view into your critical business information to help promote confidence in your decision-making process. These tools, along with a strategic approach to developing the right business metrics and drivers, aligned to the objectives of an organization, can be a competitive differentiator in the marketplace. iBi