BUSINESS PERFORMANCE MANAGEMENT

1
Chapter 9
Sections 9.2, 9.8, 9.10, 9.11

• BUSINESS PERFORMANCE MANAGEMENT

2
Business Performance Management

• Monitoring actual performance against the goals
  and objectives
• BPM needs BI as its foundation

BPM Methodologies

• Six Sigma
• Balanced scorecard (BSC)

3
Six Sigma

• A business is a collection of processes/activities
  
• Aims to reduce the number of defects in a
  business process to as close to zero defects per
  million opportunities (DPMO) as possible
• Encompasses the steps of defining, measuring,
  analyzing, improving, and controlling a process
  (DMAIC)
• Six Sigma can be challenging to apply if 000s of
  processes are involved

in Statistics, according to Empirical rule,
almost all data falls within 3s of the mean
4
Balanced Score Card (BSC)

• Designed to overcome the limitations of systems
  that are solely financially focused
• Non-financial objectives considered in BSC
• Customer
• Internal business process
• Learning and growth
• The term balance arises because contrasting
  perspectives are considered while measuring
  organizational performance
• Financial and non-financial
• Leading and lagging
• Internal and external
• Quantitative and qualitative
• Short term and long term

5
BSC
6
Performance Dashboards

• Dashboards provide visual displays of important
  information that is consolidated and arranged on
  a single screen so that information can be
  digested at a single glance and easily explored

7
Dashboards and Scorecards

• Performance dashboards
• Visual display used to monitor operational
  performance
• Performance scorecards
• Visual display used to chart progress against
  strategic and tactical goals and targets
• Both are built on a business intelligence and
  data integration infrastructure that enables
  organizations to measure, monitor, and manage
  business performance effectively
• Both can be built for each type of managerial
  control activity operational, tactical, and
  strategic

8
Dashboard design

• Challenge is to display all the required
  information on a single screen, clearly and
  without distraction, in a manner that can be
  assimilated quickly
• Use visual components (e.g., charts, performance
  bars, sparklines, gauges, meters, stoplights) to
  highlight, at a glance, the data and exceptions
  that require action.
• Should be intuitively easy to use
• Combine data from a variety of systems into a
  single, summarized, unified view of the business
• Enable drill-down or drill-through to underlying
  data sources or reports
• Present a dynamic, real-world view with timely
  data refreshes, enabling the end user to stay
  up-to-date with any recent changes in the business

9
Business Activity Monitoring (BAM)

• Processes that alert managers to potential
  opportunities, impending problems, and threats,
  and then empowers them to react through models
  and collaboration
• Makes the organization pro-active
• Aims for zero-latency monitoring of organizations
  (real-time enterprises)
• Solution steps can be taken immediately on
  detection of dissonance between observed and
  expected outcomes
• Easy access is provided to tools to model the
  problems and collaborate with other
  decision-makers, leading to a quick solution