Wednesday, February 12, 2014

BI & Analytics KPIs

BI/Analytics KPIs is Multi-Dimensional Measurement.

BI and Analytics has been in the business agenda of any forward-looking organizations for a couple of years in the row, however, measuring the value BI creates for the business is not an easy task; how do you realistically and practically measure how much better a function or business overall is doing or making decisions better because of BI? What are the principles and perspectives in devising/defining /designing/building the BI/Analytics KPIs?

Defining KPIs from strategic decision making perspectives: The BI/Analytics tools make the executives dynamic and make them prepared to take decision instantaneously. However, assessing the overall value of data as an asset, advanced analytics and improved decision support at senior or strategic organization levels is challenging, if possible at all, but this is where BI creates most of its value. Companies adopt Business Intelligence to find answers to complex questions and to move away from traditional way of waiting for the end period to view reports. Hence the factors such as new perspectives and answers; ease of analysis and the time to answer the critical questions should be the key measures of success. The true success of BI is possible only when it is seen as a business investment and not as a technology investment

Defining some KPIs from the Human Capital Management perspective, maybe from the number and/or mix of team members vs. effectiveness of decisions (increase revenue, decrease costs/expenses) vs. the whole IT Team, assuming the BI team is in IT. From a BI competence perspective, also measure/benchmark vs. other internal competence teams, showing value contributed so far. The development of KPIs in talent management shall reflect the process effectiveness and efficiency in hiring, retention, employee satisfaction and overall workforce management.   

Customer oriented KPIs: Find out what your customer Indicators are and determine how much you have to do with the success or failure of each. How did you make customer work easier? Are there instances where you are essential to overall business/group performance? Do you help to shave time off tasks? The relevant KPIs may include: Customer satisfaction, incidents solved in time, minor change requests implemented in time vs. system flexibility, etc.

Operation/Finance oriented KPIs: BI must be seen as add-on supportive towards the business regardless the business you are in. A solid BI platform brings all information from each operational process together (business processes) allowing you to visualize the strengths and weaknesses of each process and combined processes. Think about performance, cost analysis, utilization, yield management, forecasting, risk management and other areas of interest. The information becoming available is in fact the perfect baseline for decision processes. More importantly, a solid BI platform provides one version of the truth of all involved processes. Having said this, it also means that measuring the impact of changes on daily basis becomes reality. There are a few KPIs for measuring BI operational efficiency below:
Cost of BI as % of total IT,
Cost of BI as % Revenue,
Cost of each BI domain as % of the supported business function
Cost of BI per row of data
Cost of BI per business user
Average/min/max data latency per subject area
Average/min/max time to integrate a new subject area
Average daily time users spend online
Average number of rendered reports per active user
Average query/report rendering time
Active users / total users
Active reports (models, cubes) / total reports (models, cubes)
Number of user support cases per day/month
Number of change/enhancement request cases per month/year
DW volume growth
Availability/outage hours... 

BI/Analytics KPIs are to be derived from overall business benefit: The organization and all its departments get from the intelligent and actionable information it provides. As BI/ Analytics key role is to proactively identify the key trends/ leading indicators for various functions (be it dipping sales, new areas/ regions to target, customer behavior analysis to identify target segment/ product, customer satisfaction, market basket analysis, savings or risk reduction across business operations realized etc) along with definite actions to be taken up to tap key trends and address leading indicators, the KPI is timing of providing this actionable information. The BI group output should be proactive analysis with actionable information and not be reactive.

BI has two facets in delivering business values: One of the key objectives of the BI team is to provide right information at the right time to the right set of people. Regarding this aspect, SLAs involving data load window, quality of information and timely delivery of information become key measures for success of BI team. On the business analysis front, insights generated by the team and translated to corporate actions resulting into better performance of business. KPIs should be consideration for success of the team; such as a specific KPI has an impact on the Company in Revenue, Customer Satisfaction, Employee Retention, etc. and this is accomplished by defining specific measures derived from a BI project conceived in the Department, with a multi-disciplinary team (technical & functional).
KPIs can also reflect BI’s agility, quality and continuity. The value of your BI function is built on not only one off success stories but also on the consistent continuity and quality of BI service to the users across the organization. If you provide great tools and data, won some success stories for a particular business campaigns, but your users are faced on day to day basis with poor performance, outages and irresponsive support, you fail to create the value. So BI/Analytics needs to take agile approach to solve business problems timely. Agile methods allow you to adapt the requirements and deliver when you promised to deliver. Or if the requirements were changed then you have to change the project plan and to deliver what and when you promised. How can you measure the quality of a delivery and how to define targets?

Hence, it is a complex tasks to well define, design or derive the right set of BI/Analytics KPIs, it takes effort from multidisciplinary Team - functional and Technical - and eventually producing the KPIs relates to the benefits delivered by BI such as figure out potential customers, decision making, business values, operation efficiency or process optimization


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