08 July 2009

Corporate Strategy and KPI's

The next two or three posts are going to touch on business intelligence and business process management as they relate to ERP and training issues.

Folks who have attended my presentations about BI and assessing organizational readiness have heard me say, "Managers must dance to the corporate strategy and use metrics and business intelligence (BI) to guide them." To give this idea a more personal viewpoint, let's consider the following.

If my mission is to have a healthy existence and my strategy for accomplishing that is to eat properly, get appropriate rest, and exercise. I might want a collection of easy to read indicators, i.e., a dashboard, which contains metrics, such as those listed below, to guide me in measuring how well my strategy is working.

  • Bar chart that indicates daily calories consumed, including monitoring of fat, carbohydrate, fiber, and protein percentages
  • Line graph showing number of hours slept each evening
  • Pie chart that illustrates hours of exercise each week, including percentage of cardio and strength building (I need both in varying percentages)
  • Daily graphs showing:
  • walking distance covered over specific times
  • resting heart rate
  • active heart rate
  • blood pressure
An organization can (and I believe, should) follow the same approach. Sure it's easy to just follow the herd and use the key performance indicators (KPIs) that everyone else in the industry uses, in which case your organization will simply be one of many average competitors in your industry. To be a truly exceptional, and seriously competitive, organization, the KPIs used should be unique to your organization's strategy with metrics that ensure your organization is operating in alignment with its stated strategy and that the strategy is working.

Business intelligence software sales personnel may speak glowingly of the volumes of pre-built KPIs that come with their software or how simply their product can be installed and producing information for analysis. Use their pre-built KPIs and be one of the herd or strive to be the exceptional organization and engage in the hard work of developing KPIs that will guide your organization to alignment and excellence.