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July 29, 2010

30 Business Performance Indicators You Can (and should) Measure

It's all good and well using a BI solution to measure your business performance, but before you start blindly measuring anything and everything, what are some of the specific KPIs or metrics that you could focus on? They are the backbone of scorecards and dashboards, which have become an irresistible way for organizations to present performance information. Look out for our blog post next week about the differences between dashboards and scorecards.

One thing to remember : A KPI is a metric, but a metric is not always a KPI. When we use the term metric we are referring to a direct numerical measure that represents a piece of business data in the relationship of one or more dimensions. A KPI is simply a metric that is tied to a target. More often than not, a KPI represents how far a metric is above or below a pre-determined target. KPI's are normally shown as a ratio of (actual : target) and are designed to instantly inform a user if they are on track with their plan, without the end user having to specifically focus on the metrics being represented.

You should identify the most important indicators for your specific organization's needs, but here's hoping that this post will give you some inspiration or at least a starting point. Choose a few indicators to start off with; measure them on a regular basis and share them throughout your organization - you can always add more later on!

Here is a list of just some of the more mainstream indicators.

Sales

1. Bookings
2. Number of orders
3. Sales qualified leads

Finance

4. Revenues
5. Expenses
6. Profits
7. Operating margin

Technical Support

8. Number of support calls
9. Resolved Cases
10. Average waiting time

Manufacturing

11. Number of units manufactured
12. Manufacturing times
13. Number of defects

Fulfillment

14. Number of days to ship
15. Inventory levels
16. Return rates

Marketing

17. Marketing funnel: for example - Inquires -> Marketing qualified leads -> Sales qualified leads -> Opportunity Pipeline
18. Customer demographics
19. % Revenue sourced by marketing
20. Referrals
21. Social media mentions

Human resources

22. Employee satisfaction
23. Employee turnover

Information Technology

24. Network downtime
25. Fixed application bugs

Web Services

26. Number of visitors
27. Click through rate
28. Conversion rate (e.g. number of product registrations)
29. Average time per visit
30. Bounce rate

Posted by We Are Cloud at 4:15 AM | Comments (4)

July 26, 2010

TDWI's BI on a Budget Report - a review

The recently released report by TDWI's Wayne Eckerson is all about how the need among business intelligence (BI) teams to do "more with less" has significantly increased following the recession. We summarize the underlying points in the report.

One of the ways that BI teams have coped with shrinking budgets is via tactics. In the short-term, they have managed to cut costs without sacrificing quality or output by actions such as cutting low-priority projects, dismissing consultants working on them, and avoiding buying new products and expensive software upgrades. Successful negotiation of software maintenance contracts while relying on vendors for assistance has also lowered capital outlay.

In the longer term, Eckerson notes that BI has been focusing on efficiency and effectiveness to deliver a better ROI, for example by implementing self-service BI tools, consolidating spreadmarts and datamarts, and getting rid of redundant data, infrastructure, and staff.

Of course, tight or nonexistent budgets are the norm in many SMBs, which is why the recession hasn't changed much in the dynamics of how they deliver BI solutions. They continue to choose low-cost offerings, such as open source tools, cloud solutions, and in-memory visualization products, which with SMBs representing a large growth in the BI market, is good news for BI vendors offering these types of products.

Finally, new technology is the next move taken by organizations finding themselves constrained by their budgets - companies are aggressively searching out new technologies to improve the efficiency and effectiveness of their BI operations. SMBs are jumping on new offerings to get a foot in the door, while established BI teams are replacing existing technology with next-gen capabilities.

Eckerson makes a few recommendations for doing more with less:

1. Empower users. Users want tools that empower them to create their own reports and rescue the BI team from report writing so that they can deliver added value within budget constraints.

2. Align with the business. With limited resources, it's essential that BI teams are focused on projects of significant value. To do that, they need to work closely with the rest of the organization.

3. Work smart. When resources are tight, BI teams need to work more efficiently and effectively. They can do this by embracing existing tools instead of purchasing new ones, postponing expensive upgrades and making do with existing versions, and more.

4. Consolidate and negotiate. One method to cut costs is to negotiate new maintenance licenses with vendors and ask them to donate software to build prototypes and conduct proofs of concept for free. Another strategy is to consolidate data marts and BI tools to reduce overheads.

5. Explore new technology. Open source, cloud BI, visual, and discovery tools, plus data warehousing appliances all offer better functionality and performance for less money. These technologies are increasingly being adopted by small and midsize BI programs and on-the-ball, larger BI teams.

6. Tactics vs. strategy. BI teams should look for instant tactics to reduce costs without sacrificing output, such as those tactics with more or less immediate returns, as discussed earlier. Strategic initiatives could compromise any number of things, but in particular deployment of self-service BI tools, consolidation, implementation of new technologies and better management of scope and risk.

The bright side of the downturn is that BI teams are now ready to go with new processes, organizations, and technology which can deliver significant value to their organization and clients. With budgets being cut, most BI teams have been forced to focus on their efficiency drive by innovating and coming up with new ways to deliver projects. The recession has really tested the resilience of BI teams, as well as the ability of solution providers to adapt to their changing needs. This is partly why we've built Bime to be like it is - requiring no upfront cost, no maintenance and no technical expertise, this makes it lightweight and scalable, which in turn, makes data analysis faster, easier and cheaper - a perfect combination for those on a tight budget.

Posted by We Are Cloud at 3:15 AM | Comments (4)

July 20, 2010

Social Media and Business Intelligence

There is no doubt that social networking on the Internet has fast matured to the point where it is an essential part of our daily lives. Millions of us are using various online social networks to help achieve better personal and business visibility, but can we use this information to add value to our organizations through BI?

We had a number of reactions to our blog post earlier this month about BI and Data Visualization Trends, and one of the topics that seemed to catch people's attention was the area of social media and BI. So we decided to delve a little deeper into the topic.

As we become more reliant on online social networking sites to connect with our friends, peers and colleagues, we sometimes forget that we are generating an unprecedented amount of data about ourselves, and in doing so we are essentially providing a wealth of demographics, opinions and behavioral information for third-parties. A large number of businesses are now gathering real-time intelligence and using social media data to gain a competitive edge. Organizations can analyze the data to better understand customer feelings and satisfaction, market trends and threats from competitors. From a cultural point of view, the data can also provide insight into the collective opinions of the public on current issues, including political events, social crises (such as the BP oil spill) and even reality TV shows. However, social data is arguably the most challenging to integrate into a BI platform because it is so fluid and unstructured. BI pros are used to working with financial and sales data, which has a more clear structure. But, as John Thompson, CEO of Kognitio's U.S. operations says, "How do you take 140 characters of what Tim and Donna said, put it in a database and run a trend line on it?".

Social media and business intelligence are hugely different; so different in fact, that the strengths and weaknesses of each often compliment each other. When you see something interesting in a chart or dashboard, your first instinct is something like "I've got to tell someone about this" or "I wonder if they know about this." Intelligence always stimulates a Social impulse. Now turn it around the other way. When you are with colleagues discussing how to deal with an issue facing the team, what is your reaction? Probably something like "let's start with facts" or "what do we know about the situation?". Social collaboration always stimulates an Intelligence impulse.

3 examples of when social media is not perhaps not the right choice:

1. Your product has less than 5 customers - when your customer base is so targeted, you need to be direct with such a limited marketing budget. Regular face-to-face meetings, customer events and other tactics would be a better fit for this kind of product.

2. You don't have an internal advocate for social media - a key advocate within the company is absolutely imperative. This should be a key decision maker within the organization that can supply the needed resources and leadership to allow the organization to successfully leverage social media. Without one, the organization risks making the social networking effort too early and having it fail its objectives.

3. You need to generate a high volume of short-term sales - can social media drive sales? Yes. Can it drive targeted short-term high-volume sales? In most cases it can not. Creating transactional opportunities on the web takes trust, but trust takes time to establish.

As a result of our article, we generated some discussion about the role of social media and BI - we found there was a general consensus around social media not being a fad, and that organizations will be able to draw long-term value from social networking if they use it correctly. Similarly, it was thought that if organizations do not make their BI easy to use and recognize the impact that social media can have, they are likely to fall behind their competitors. Social networking should not be underestimated as a business tool - the important thing is just to know how to leverage business from it.

Posted by We Are Cloud at 2:30 AM | Comments (9)

July 15, 2010

Geo visualization: Making Better Business Decisions

In today's economy, the need for making the right business decisions is imperative. That's why adding location intelligence to your data can give you a better insight into your data, and is useful for making those all-important critical business decisions.

Just about any industry sector can benefit from location intelligence. Financial, insurance, retail, communications, even governmental agencies can benefit from geographical information displays (e.g. through Google Maps) as they give you a real picture of 'where your data is'. Take the heatmap feature in Bime as an example.


See: https://newsletter.bimeapp.com/players/dashboard/7DE34AA613ABCCA12B27E513DB3DC709

The great thing about the heatmap is that it is not simply a pretty picture - hover over the heatpoints and you can bring up the detailed data lying behind them by clicking on it. This is particularly helpful when different areas of focus are close together, like on the dashboard above. By clicking on "Rendering mode" you can switch between the heatmap or graduated circles view. You can filter your view by states by checking or unchecking the relevant boxes under "attributes" on the right. You can also filter by the measure (profit) by using the slider below the list of attributes.

Geographic data visualizations can help businesses answer fundamental questions, such as:

- What geographic area do we serve?

- Are our sales territories and client clusters properly aligned?

- What areas of potential clients might we have missed or overlooked?

Now we've discussed why an organization might need geocoding, but how does it make use of it? Here is one example of many.

Geocoding as a Marketing Tool

Many businesses use geomarketing to perform specific market/region data analysis for the purpose of making sound business decisions. Geomarketing allows businesses to analyze customers on digital maps, acquire valuable market data, and plan their next move, whether this be at a local, national, or global level. This enables organizations to better coordinate all of their domestic and international sales and marketing operations - for improved efficiency.

For marketers, these types of visualizations are critical for targeting demographics for customer profiling and for customizing marketing messages to a specific audience - based on the geographic location of potential customers.

Bime's geo visualization allows you to see where you are in the real world, quite literally, using the Bime functionality on top of Google Maps. We've been using this feature for a while now - just as a line graph is probably the most effective way of displaying time data, the heatmap is definitely the way to go for geographic data. With this, you can visualize where your staff, clients, suppliers, or any other facet of your business is concentrated. As we outlined above, this can do wonders for your organization, and equally importantly, keep you one step ahead of the competition.

Posted by We Are Cloud at 11:15 AM | Comments (6)

July 5, 2010

5 BI and Data Visualization Trends for 2010

The Business Intelligence landscape is one that is constantly changing and taking advantage of what technology has to offer. The economic recovery has triggered some organizations to consolidate and update software. But what other trends have we seen this year?

5 trends we have identified in the BI and Data Visualization world this year are:

1. Growth of the Data Warehousing Market

Recently we have seen a trend toward consolidation and building a centralized enterprise data warehouse. As a result, a massive modernization drive intended to improve overall decision-making, is now taking place. Within the past year, data warehousing solutions have continued to become more and more popular because of their high levels of performance, ability to incorporate analytics, and their integration within larger BI platforms. As the costs of space and processing speed become lower, vendors can give organizations more powerful offerings but with lower price tags. This has helped to expand the use of data warehouses within organizations, both by the number of companies adopting data warehouses, and by the types of applications that can be used.

2. Social Media for BI

Providers are slowly integrating social networking functions into their solutions. Customers are beginning to expect rich interactive experiences that mimic their internet use, and BI can match these expectations if it draws on the information from interactions that occur in social computing environments. Due to the ability to create powerful interactions and improve ease of use, more providers are focusing on developments that mimic social media and Web 2.0 interactions. In doing so, the role of BI has become increasingly popular and more widely applied within organizations because of the assumed ease of use.

3. Increased Use of Different Data Sources

The reality of today is that in order to stay ahead of competitors, companies are required to integrate various information sources to get additional value from their data and a full operational view of the organization. Vendors are now developing business-focused applications that take these requirements into account and offer customers a ready-made solution that targets business issues being faced by companies within different markets.

4. Renewed Focus on Fraud Detection and Security

Because of the amount of media coverage of fraudulent activities, the ability to detect fraud and to maintain a secure environment is an area constantly at the forefront of IT. Organizations are required to make sure that information within the firewall is not left at risk. So as threats against IT security have continued to augment, organizations have been more committed to tightly monitoring their environments and the information within them. Providers have done a good job ensuring security - however, because of increased risk, organizations and vendors alike will focus more on maintaining high level security within their information centers, especially due to all the new forms of data being integrated into analytics platforms.

5. Advanced Data Visualizations

Data visualization offerings keep expanding, and the inclusion of geo-spatial analysis has helped bring analytics to the forefront of visualization. For organizations looking at product, geographical or customer data, the ability to identify trends using maps has helped them to recognize trends a lot faster. Although this technology has been around for a while and is not "new" as such, it is only recently that companies have started to integrate this type of functionality on a regular basis within their overall dashboard use.

The pressure is on!

Within the BI space, constant advancements in technology means trends are always shifting. Depending upon economic and market factors, organizations may not adopt improved offerings from developers. On the other hand, early adopters often look to BI for inspiration on ways in which they can help their business overtake the competition. Overall, 2009 saw many releases within back-end databases and front-end visualizations. On top of this, there has been serious demands for low-cost solutions with quick implementation times, and solution providers will feel continuous pressure to improve upon their current products throughout the rest of 2010.

Posted by We Are Cloud at 9:45 AM | Comments (4)

July 1, 2010

From Record Keepers to Strategic Advisors

How do finance departments use business intelligence? We take a deeper look into how one fundamental area of an organization can benefit from deploying BI.

Opportunities for finance

The finance department sits at the heart of any organization. Part of its job is to collect, disseminate and analyze financial and non-financial information - a somewhat time-consuming and laborious process. Finance can therefore be a powerful agent of organizational change. It can use the information that it collects to assist decision-making, achieve objectives, and avoid problems.

However, a lot of finance departments are spending too much time and effort creating financial documentation, and not enough time analyzing their data. This is where Business Intelligence comes to the rescue. Adopting BI practices frees the finance team from manual data collection and report production so that it can engage in more value-added activities.

BI tools can assist with the creation of a data warehousing environment that contains all the data that the finance department needs, with the appropriate rules and calculations already applied. They will also provide reporting, analysis, dashboard, and planning tools that access the data warehouse sources, as well as empower finance users to explore data on their own without help from their colleagues in IT. Once a solid BI infrastructure is in place, the finance department can spend 80% of its time analyzing data instead of collecting it (Wayne Eckerson, 2010).

Imagine a future

- where the CEO calls a meeting and everyone agrees on revenue, profit, and cost numbers, and decisions are made based on facts, not gut feel, tradition, or arm twisting.
- where a CFO checks the overall profit and loss position of the company on a daily basis and, with a few clicks, views the contributions of every region, group, and product line, and then drills down to view individual orders and expenditures at a product, customer, or supplier level.
- where a controller can automate the standardization of financial transactions across a global company in a few seconds and generate statutory reports in a few hours or days.

A new role for finance

To add real value to the organization, finance needs to move beyond basic data collection and reporting. It must analyze the information it collects for trends, patterns, and insights so it can advise the business how best to improve operations, optimize performance, and adapt to changing business conditions. More and more organizations are now seeing that BI can be instrumental in pioneering these kind of changes, not just for the finance department, but on a company-wide basis as well.

Posted by We Are Cloud at 5:00 AM | Comments (4)