Analytical Diaries

Are you working in an efficient or an effective organization? Or even both? And how do you measure where your BI delivery unit ranges on a maturity scale of those two attributes.

I’ve spoken to a range of experts from both the consulting end or company end of BI delivery. Here’s a brief account on their take of these questions:

a) Efficiency or Effectiveness

While many state-of-play controlling and performance measurement frameworks claim their grasp on efficiency very few seem to have tried to tackle effectiveness. One of the few approaches put into practice is trying to compare the effectiveness of different projects from all functions of a large Financial Services firm. Here the top 500 projects – whether IT, marketing, HR or accounting related – where put to the effectiveness test. A dedicated effectiveness business case template was developped converging existing financial and qualitative metrics into a common grid. Just this baselining effort skinned out a staggering number of 40 projects that were discarded as non-strategic. Out of the rest the anticipated change budget was alloted across the functions dependent on the projects decreasing effectiveness measure. After 18 months of following this practice the Organization in question increased their effectiveness by 40% – instead of just lowering their cost they were able to use their staff according to current priorities and available skills.

b) Specialized vs. Generalized

The second religious battle one can find in almost any BI competency center is whether it is favourable to have few generalized reports & dashboards understood by the majority of the people or to have dedicated detailed reports and dashboards catering to all the specific questions of the experts. Our approach is to grow from the generic to the specialized and not to tackle these different levels of complexity at once. While you can use the broader, mostly Top down driven Big Picture View to generate and firm up senior sponsorship and involvement it is hard to play the game bottom-up. The usual exception is if you can cater to a broad and important circle of experts – say the client advisors and relationship managers at a private bank. But even these guys these days need to have a broad and holistic picture of their clients, their client’s portfolio, the product and service offering en vogue and the current risk appetite of their organization. So as a generic rule of thumb I would suggest a broad yet powerful audience with a good grasp of the entire organization is a fair bet.

c) Active vs. Passive

BI tradinionalists would rate this one academic but to me it’s the make or break of successful BI solutions. If your report, dashboard or interactive analysis tool is nothing more than a tool showing off glitzy charts and color coded tables, chances are that it will not have a big impact on your organization. So if you really want to see your cause to have an effect you should think about process and feedback. Process embedding is a sure and proven way to integrate reporting checkpoints along the ways business moves. Even more powerful though harder to implement are self contained or self propelling feedback loops that enable an organization to reflect about itself. Think about a client advisor that actively analyses her client book to hunt for new opportunities and actions within – and even records them while analyzing. Think of the team head that structures her feedback sessions based on facts analyzed from the portfolio of her advisor’s client books. Think about the advisor peer that has seen and knows it all but has an additional (financial or appreciative) incentive to share her tactics with her peers.

So if you now sit back and take stock it seems quite easy to take a qualitative verdict on your measurement framework. Not so easy still to measure its effectiveness. One line of thought we are assessing for one client may be promising: Just the experienced investor does with stock picks – decide the quantitative hurdle for each KPI before it’s launched. Review after 3 and 6 month and discard it if it hasn’t made a difference. Go ahead – you make the difference.