Software // Information Management
10:30 AM

10 Steps to 21st Century BI & Performance Management

To improve decision making, follow top tips including reducing the number of spreadsheets in use and expanding the use of performance metrics.

What To Do Next

This benchmark research found strong demand for BI and performance management, both separately and together. Organizations’ most important goals in deploying BI tools are to provide access to data through a variety of tools (cited by 57% of participants), to make it possible to apply analytics to the data easily (61%), and to communicate and collaborate on the analytics (55%). They also view as important expanding the focus of BI to support performance management and decision-making. Yet the research also found only moderate maturity in the use of BI and performance management. Many lack confidence in the tools they currently use for either BI or performance management but lack resources or budgets for acquiring new ones. Nevertheless, two-thirds (66%) of organizations are planning to evaluate new technologies; your organization may be among them. Based on the research, here are ten recommendations on how to proceed.

1. Assess your organization’s maturity in BI and performance management. Applying the Ventana Research Maturity Index methodology, we found that only 15 percent of organizations reach the "Innovative" level in all four functional categories of maturity (People, Process, Information and Technology). Our analysis also reveals that maturity across these categories is uneven. For example, only 11 percent of organizations are at the Innovative level in the Information category while 22 percent reach it in the People category. Fewer than one-quarter of organizations have deployed BI in key processes that could benefit from it. Information maturity is hampered by inadequate access to data and an inability to interact and collaborate. From a technology perspective, organizations still use spreadsheets and e-mail too often to perform BI tasks. Examine your own capabilities in each of the four maturity categories and research how organizations that rank higher are able to do so.

2. Consider the effectiveness of your current tools and applications. Ventana found that most organizations have at least some doubts about the technology they currently use for BI and performance management. Only 12 percent of participants said they are completely confident in their BI technology, and only 9 percent made that assertion for the technology they use to manage performance. Respondents did not follow a traditional technology-adoption curve: Only about one-third said they are confident in BI (35%) and performance management (36%), far fewer than said they are either only somewhat confident or not confident (51% and 55%, respectively). In both cases, executives expressed strong confidence more often than management and analysts, who are more likely to be experienced users of these tools. Explore users’ feelings about the tools they use and identify to tools that should be replaced.

3. Reduce the number of BI tools and the use of spreadsheets. BI systems have been around for years now, yet all but 10 percent of participants said they have at least some degree of difficulty standardizing BI into a consistent and reliable technology; almost half (44%) indicate that this is significantly or extremely difficult to do. The research shows that a major contributor to the difficulty is the array of tools, systems and applications used for BI and performance management: Ten different types were cited as used every day by at least 20 percent of participants. Among these, spreadsheets led the way, used daily by almost half (42%) of the research participants; close to one-third (32%) use e-mail to distribute information and collaborate.

Spreadsheets are an impediment to collaborative processes in enterprises. They are prone to errors and conflicts in data between files that are thought to be the same. Only 13% of organizations use spreadsheets "occasionally, rarely or never" for BI. It is not surprising that 39% frequently find errors; only 8% rarely or never find errors. Nearly half of participants (47%) said such errors must be corrected often or very often after the spreadsheet has been shared with others, which is time-consuming and costly. We advise taking steps to reduce the number of BI tools in use and standardize them. This research reinforces the many past findings that spreadsheets should not be used for this or any collaborative, enterprise purpose.

4. Compare the BI capabilities you have with those you want. The research shows that most participating organizations have deployed or are deploying basic BI capabilities such as querying sources for specific data (74%), generating reports from data (74%) or accessing data from a spreadsheet for further analysis (70%). However, notably fewer have more advanced capabilities. For example, only 30% can apply analytics to data effectively, 24% can collaborate on data and metrics, and 22% can conduct what-if analysis for planning and forecasting. Nor are these the capabilities most organizations are currently working to deploy; the most popular at that stage are communicating data in the right format (27%), searching for data (26%), presenting data effectively (25%) and creating measures and metrics (24%). Conducting what-if analysis (25%) and collaborating on data and metrics (23%) rank high among the capabilities that participants hope to deploy; the most desired is to access data via a mobile device (27%). Decide what BI capabilities you want and examine products that can supply them.

5. Determine whether products currently in use can handle performance management well. Participants in our research said their most important goals in managing performance are to align actions and decisions to goals and strategy (cited by 77%) and to be able to plan effectively for improvement (75%). Business intelligence can be a key tool for helping organizations understand, align and optimize their performance; however, participants expressed mixed feelings about how well their BI tools help them in these efforts. In several aspects of understanding performance, fewer than 10% said their current products are superior, and the largest percentages called them only adequate or worse. In aspects of aligning performance, products fared worse: Again fewer than 10% rated their products superior in any category, and inadequacy outpolled basic adequacy. For optimizing performance, responses followed the same pattern, with no aspect exceeding 10% in superior rating. These findings suggest that you should take a hard look at the adequacy of the tools and systems you use to manage performance; determine whether other tools would enable more cost-effective performance management.

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