Business Intelligence Sampler Quotes

“Performance measure. Throughout this book, the term performance measure refers to an indicator used by management to measure, report, and improve performance. Performance measures are classed as key result indicators, result indicators, performance indicators, or key performance indicators. Critical success factors (CSFs). CSFs are the list of issues or aspects of organizational performance that determine ongoing health, vitality, and wellbeing. Normally there are between five and eight CSFs in any organization. Success factors. A list of 30 or so issues or aspects of organizational performance that management knows are important in order to perform well in any given sector/ industry. Some of these success factors are much more important; these are known as critical success factors. Balanced scorecard. A term first introduced by Kaplan and Norton describing how you need to measure performance in a more holistic way. You need to see an organization’s performance in a number of different perspectives. For the purposes of this book, there are six perspectives in a balanced scorecard (see Exhibit 1.7). Oracles and young guns. In an organization, oracles are those gray-haired individuals who have seen it all before. They are often considered to be slow, ponderous, and, quite frankly, a nuisance by the new management. Often they are retired early or made redundant only to be rehired as contractors at twice their previous salary when management realizes they have lost too much institutional knowledge. Their considered pace is often a reflection that they can see that an exercise is futile because it has failed twice before. The young guns are fearless and precocious leaders of the future who are not afraid to go where angels fear to tread. These staff members have not yet achieved management positions. The mixing of the oracles and young guns during a KPI project benefits both parties and the organization. The young guns learn much and the oracles rediscover their energy being around these live wires. Empowerment. For the purposes of this book, empowerment is an outcome of a process that matches competencies, skills, and motivations with the required level of autonomy and responsibility in the workplace. Senior management team (SMT). The team comprised of the CEO and all direct reports. Better practice. The efficient and effective way management and staff undertake business activities in all key processes: leadership, planning, customers, suppliers, community relations, production and supply of products and services, employee wellbeing, and so forth. Best practice. A commonly misused term, especially because what is best practice for one organization may not be best practice for another, albeit they are in the same sector. Best practice is where better practices, when effectively linked together, lead to sustainable world-class outcomes in quality, customer service, flexibility, timeliness, innovation, cost, and competitiveness. Best-practice organizations commonly use the latest time-saving technologies, always focus on the 80/20, are members of quality management and continuous improvement professional bodies, and utilize benchmarking. Exhibit 1.10 shows the contents of the toolkit used by best-practice organizations to achieve world-class performance. EXHIBIT 1.10 Best-Practice Toolkit Benchmarking. An ongoing, systematic process to search for international better practices, compare against them, and then introduce them, modified where necessary, into your organization. Benchmarking may be focused on products, services, business practices, and processes of recognized leading organizations.”
― Douglas W. Hubbard, Business Intelligence Sampler: Book Excerpts by Douglas Hubbard, David Parmenter, Wayne Eckerson, Dalton Cervo and Mark Allen, Ed Barrows and Andy Neely

“Establishment of a quarterly rolling planning regime, wherein management both sets out its revenue and expenditure requirements for the next 18 months and seeks approval for expenditure planned for the next 3 months, is a key requirement for beyond budgeting management. Each quarter, before approving these estimates, management sees the bigger picture six quarters out. While firming up the short-term numbers for the next three months, all subsequent forecasts also update the annual forecast. Budget holders are encouraged to spend half the time on getting the details of the next three months right, as these will become targets, on agreement, and the rest of the time on the next five quarters. Each quarter”
― Douglas W. Hubbard, Business Intelligence Sampler: Book Excerpts by Douglas Hubbard, David Parmenter, Wayne Eckerson, Dalton Cervo and Mark Allen, Ed Barrows and Andy Neely

“the traditional form of Hoshin Kanri, there is a grouping of four perspectives. It is no surprise that the balanced scorecard perspectives are mirror images (see Exhibit 1.8). As with the balanced scorecard, Hoshin Kanri can be improved with the introduction of employee satisfaction and environment and community. EXHIBIT 1.8 Similarities between Hoshin Kanri and Balanced Scorecard Perspectives”
― Douglas W. Hubbard, Business Intelligence Sampler: Book Excerpts by Douglas Hubbard, David Parmenter, Wayne Eckerson, Dalton Cervo and Mark Allen, Ed Barrows and Andy Neely

“Hoshin Kanri Business Methodology The balanced scorecard had its origins in Hoshin Kanri, so it is appropriate to examine this business methodology. As I understand it, translated, the term means a business methodology for direction and alignment. This approach was developed in a complex Japanese multinational where it is necessary to achieve an organization-wide collaborative effort in key areas. One tenet behind Hoshin Kanri is that all employees should incorporate into their daily routines a contribution to the key corporate objectives. In other words, staff members need to be made aware of the critical success factors and then prioritize their daily activities to maximize their positive contribution in these areas.”
― Douglas W. Hubbard, Business Intelligence Sampler: Book Excerpts by Douglas Hubbard, David Parmenter, Wayne Eckerson, Dalton Cervo and Mark Allen, Ed Barrows and Andy Neely

“Result indicators that lie beneath KRIs could include: Net profit on key product lines Sales made yesterday Customer complaints from key customers Hospital bed utilization in week”
― Douglas W. Hubbard, Business Intelligence Sampler: Book Excerpts by Douglas Hubbard, David Parmenter, Wayne Eckerson, Dalton Cervo and Mark Allen, Ed Barrows and Andy Neely

“The PIs help teams to align themselves with their organization’s strategy. PIs are nonfinancial and complement the KPIs; they are shown with KPIs on the scorecard for each organization, division, department, and team. Performance indicators that lie beneath KRIs could include: Percentage increase in sales with top 10% of customers Number of employees’ suggestions implemented in last 30 days Customer complaints from key customers Sales calls organized for the next week, two weeks Late deliveries to key customers The RIs summarize activity, and all financial performance measures are RIs (e.g., daily or weekly sales analysis is a very useful summary, but it is a result of the efforts of many teams). To fully understand what to increase or”
― Douglas W. Hubbard, Business Intelligence Sampler: Book Excerpts by Douglas Hubbard, David Parmenter, Wayne Eckerson, Dalton Cervo and Mark Allen, Ed Barrows and Andy Neely

“The common characteristic of these measures is that they are the result of many actions. They give a clear picture of whether you are traveling in the right direction. They do not, however, tell you what you need to do to improve these results. Thus, KRIs provide information that is ideal for the board (i.e., those people who are not involved in day-to-day management). KRIs typically cover a longer period of time than KPIs; they are reviewed on monthly/quarterly cycles, not on a daily/ weekly basis as KPIs are. Separating KRIs from other measures has a profound impact”
― Douglas W. Hubbard, Business Intelligence Sampler: Book Excerpts by Douglas Hubbard, David Parmenter, Wayne Eckerson, Dalton Cervo and Mark Allen, Ed Barrows and Andy Neely

“1. Key result indicators (KRIs) tell you how you have done in a perspective or critical success factor. 2. Result indicators (RIs) tell you what you have done. 3. Performance indicators (PIs) tell you what to do. 4. KPIs tell you what to do to increase performance dramatically. EXHIBIT 1.1 Four Types of Performance Measures”
― Douglas W. Hubbard, Business Intelligence Sampler: Book Excerpts by Douglas Hubbard, David Parmenter, Wayne Eckerson, Dalton Cervo and Mark Allen, Ed Barrows and Andy Neely