Monday, February 20, 2017

The Monthly “Dot Connections”: Connecting Dots to Pursue the Art of Performance Measurement

Digital is the age of creativity and innovation, and creativity is all about connecting the dots.

The effects of an increasingly digitalized world are now reaching into every corner of businesses and every aspect of organizations. Digital is the age of creativity and innovation, creativity is the most wanted trait for digital leaders and professionals today, and innovation is the light every organization is pursuing. Creativity is all about connecting the dots. Which dots shall you connect between different management disciplines and practices in order to accelerate digital transformation?

 Connecting Dots to Pursuit the Art of Performance Measurement

Scoreboard vs. Dashboard: The balanced scorecard (BSC) is a strategy performance management tool - a semi-standard structured report, supported by design methods and automation tools, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions. In management information systems, a dashboard is "an easy to read, often single page, real-time user interface, showing a graphical presentation of the current status (snapshot) and historical trends of an organization’s key performance indicators to enable instantaneous and informed decisions to be made at a glance?
Strategic KPIs vs. Operational KPIs? KPIs are indicators to identify if the adopted strategy, operation, and process, etc., is working toward the objective. As such, you don't "adopt" a KPI to "achieve an outcome," you adopt a strategy or operational workflow to achieve the outcome, and you define KPIs to monitor the progress and performance. That’s the name KPI –Key Performance Indicators stand for. The provocative question is: is it possible to link operational KPI's to strategic ones to reflect and track the overall progress in achieving the strategic goals?
Leading Indicator vs. Lagging Indicator? As Drucker wisely pointed out: “You can only manage what you're measured.” Benchmarking and measuring are both science and art. There are many practical metrics and KPIs, but not every metric is created equal. The concept of leading and lagging indicators, as applied to the Balanced Scorecard, relies on an understanding of the cause-effect relationships between KPIs in the different perspectives. But what’re the differences between leading indicators vs. lagging indicators?
CapEx vs. OpEx? More and more IT organizations are pushing up their Cloud envelope, though Cloud Computing still takes time to get matured and it doesn't necessarily equate to faster software development or better quality of software. Still, there are some significant advantages such as the ability to scale up or down as demand waxes and wanes, global availability and transforming from CapEx. To Opex., etc.
How to Connect the Dots between PI vs. KPI? Performance Indicators (PI) measure progress across a broad range of intended outcomes (goals, objectives, even outputs) and are used at all levels of the organization. Key Performance Indicators can be a subset of PIs, or they can roll several PIs into one (an index). KPIs are used to measure overall progress of the organization toward its mission and primary goals, they are high-level indicators that everyone in the organization can relate to. KPIs are often used to create corporate dashboards; they can be used in PR documents and other reporting tools to present an organization's outcomes to the public.
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