DTEL (Department for Technology Enhanced Learning)

The Centre for Technology enabled Teaching & Learning , N Y S S, India

Teaching Innovation - Entrepreneurial - Global 1

 DEPARTMENT OF COMPUTER
TECHNOLOGY
VII-SEMESTER
BUSINESS INTELLIGENCE AND
ITS APPLICATIONS

CHAPTER NO.5
Introduction to business metrics and
KPIs, Basics of Enterprise Reporting

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 CHAPTER 5:- SYLLABUS
Introduction to Business Metrics and KPIs, Basics of Enterprise
1 Reporting: A typical enterprise
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2 Malcolm Baldrige - quality performance framework

3 Balanced scorecard

4 Enterprise dashboard

5 Balanced scorecard vs. enterprise dashboard

6 Enterprise reporting using MS Access / MS Excel

7 Best practices in the design of enterprise dashboards

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LECTURE 1: Introduction to business metrics and KPIs Metrics

Measurement System Terminology

Data – It is a collection of facts which have similar attributes or

characteristics.

“Phone number” is a named collection of, say, mobile phone

numbers of your friends.

Measure – Data with associated unit of measure (UOM) is

typically termed as measure.

“Lab hours per month” has a numeric data associated with

“time duration”.
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LECTURE 1: Introduction to business metrics and KPIs Metrics

Measurement System Terminology

Metric – It is a system of measures based on standard UOM
with a business context. The term business metric also
refers to the same.
“Product defect rate” by city is an example of measuring
“what percentage of goods was returned by customers in
different cities”.
Indicator – It is a business metric used to track business
results or success/performance. “Call drop frequency” for
mobile phone users is an indicator of user dissatisfaction.
Index – It consists of a composite set of indicators used to
address the overall health of business operations.
“Customer satisfaction index” measured on a scale of 1 to 5.
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LECTURE 1: Introduction to business metrics and KPIs Metrics

Measurement System Terminology

A metric data when properly defined includes four
components:

Subject – This measure is about a customer, a product, a

supplier, an employee, etc.
Quantum – It is the value of the measure, such as cost,
frequency, duration, amount, etc.
Stratum – It is the grouping consideration expressed like By
Location, By Quarter, By Customer, etc.
Application – Value compared with similar measurements
like previous month, forecast, target, etc.

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LECTURE 1: Introduction to business metrics and KPIs Metrics

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LECTURE 1: Introduction to business metrics and KPIs Metrics

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LECTURE 1: Introduction to business metrics and KPIs Metrics

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LECTURE 1: Introduction to business metrics and KPIs Metrics

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LECTURE 1: Introduction to business metrics and KPIs KPIs

KPIs are objective, measurable attributes of business performance, which assist in

informed decision-making.
KPIs should be:
Relevance and functionality – The KPIs chosen should be directly related to business
results that the company is trying to produce in the specific business function. Like,
your body temperature measurement can only indicate whether you have fever or not,
but can say nothing about your blood pressure!

Understandable – Chosen KPIs must be defined unambiguously. A KPI needs to be

understood in one and only one way by all stakeholders. It must be documented, and
its definition must be easily accessible to all users.

Reliability and Credibility – The value of KPIs needs to be authentic and should be
validated as “trusted” or “dependable”. Someone is going to base an important
decision on the chosen metric. Adequate checks are needed to declare data as
trustworthy. This also means that the data must represent the “single version of truth”.

Abuse-proof – An abuse-proof measure is unlikely to be used against intended

purpose or individual(s) involved in the measurement process.
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LECTURE 1: Introduction to business metrics and KPIs Sample KPIs

Few Sample KPIs Used by the Human Resources Division

•Average time to recruit.

• Average open time of job positions.

• No. of responses to open job positions.

• No. of interviews to fill up open job positions.

• No. of offers that were made.

• No. of responses to the offers made.

• % of vacancies that were filled within x time.

• % of new employees that remained after x time.

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• % of new employee satisfaction rate.
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LECTURE 1: Introduction to business metrics and KPIs Sample KPIs

Mapping Metrics to Business Phases

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 THANK YOU

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LECTURE 2: Basics of Enterprise Reporting: A typical enterprise

Learning Objectives and Learning Outcomes

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LECTURE 2: Basics of Enterprise Reporting: A typical enterprise

Reporting Perspective Common to all levels of Enterprise

Function Level
Reports generated at this level may be consumed by users within a
department or geographic location or region or by decision makers at
the corporate level
Internal/external
It means the users of report are internal or external to the enterprise.
Correctness as well as attractive presentation of the report is of most
importance
Role - based
provide standard format of report to similar roles across the enterprise,
as they are likely to make similar decisions

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LECTURE 2: Basics of Enterprise Reporting: A typical enterprise

Reporting Perspective Common to all levels of Enterprise

Strategic / operational
Strategic reports inform the alignment with the goals, whereas
operational reports present transaction facts
Summary / detail
Summary reports do not provide transaction level information,
whereas detailed reports list atomic facts
Standard / ad hoc
Department tend to generate periodic reports, say, weekly, monthly
reports in standared format. Executives many times need ad hoc
reports for critical business decision making

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LECTURE 2: Basics of Enterprise Reporting: A typical enterprise

Reporting Perspective Common to all levels of Enterprise

Purpose
According to the purpose for which report is to be generated, its
formulation changes. reports are like, statutary reports, audit reports,
analytical reports, scorecards
Technology platform-centric
Reports in todays context need not use paper at all. Dashboards could
be delivered on smartphones and tablets. reports could be published in
un-editable form with watermark

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LECTURE 2: Basics of Enterprise Reporting: A typical enterprise

Report Standardization and presentation practices

Data standardization
Enable enterprise users performing same role to receive common, pre-
determined data sets that relate directly to their role
Content standardization
This is tightly tied to the name of the report
Presentation stadardization
Enterprise set stadards on naming conventions, date formats,
color/black-white usability standards, use of logos, fonts, page formats,
cover pages
Metrics standarddization
Find the metrics that best reflect the status of performance to help teams
control the progress towards their goals
Reporting tool's standardization
Enterprise deploy specific class of toolsfor requirements of
departments/locations/audience 19

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LECTURE 2: Basics of Enterprise Reporting: A typical enterprise

Common Report layout types

Tabular reports
Enable enterprise users performing same role to receive common, pre-
determined data sets that relate directly to their role
Matrix report
Summarized data
Chart reports

Gauge reports

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LECTURE 2: Basics of Enterprise Reporting: A typical enterprise

Enterprise Reporting Characteristics in OLAP World

• Single version of truth – The value of providing the same “fact value”
irrespective of the path the user has taken to reach for the data is of
paramount importance in reporting.

• Role-based delivery – This feature is critical to avoid information overload.

• Anywhere/anytime/any-device access – Users have their own preferences

and therefore flexibility needs to be built to ensure that users come to the
same source of information again and again and don’t find alternative ways to
decision making.

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LECTURE 2: Basics of Enterprise Reporting: A typical enterprise

• Personalization – Users’ choices of delivery method, format like

PDF/worksheet/CSV, book marking, customizing (in terms of
language), etc. will need to be addressed.

• Security – Enterprises have huge concern over the unauthorized

access to business-critical information, hacking by malicious
sources, inadvertent leakage of business data, etc. The security
framework needs to be thoroughly examined before
implementing reporting.

• Alerts – Decision makers need immediate notification of

threshold breaches of critical business KPIs. These alerts need to
be delivered to various devices such as laptop, mobile devices in
different forms like email, sound, voice message, SMS text, pop-
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up, etc. depending on user preferences.
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LECTURE 2: Basics of Enterprise Reporting: A typical enterprise Corporations and Strategy

• Traditional Strategy Deployment and Communication follows functional

hierarchy

• Strategy Formulation involves a little Planning and lots of Budgeting

• Only 5% of the workforce understands the strategy, 85% of executives spend

less than 1 hour per month discussing strategy, only 25% of Managers have
incentives linked to strategy – Fortune Magazine Survey

• 35% of stakeholder valuation decision is based on non-financial data

–Strategy Execution
–Management Credibility
–Innovation
–Ability to Attract Talent

“You can’t manage what you can’t measure.

You can’t measure what you can’t describe” 23

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 THANK YOU

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LECTURE 3: Malcolm Baldrige - quality performance framework

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LECTURE 3: Malcolm Baldrige - quality performance framework Leadership

Describes how personal actions of the organization's

senior leaders guide and sustain the organization and also
how the organization fulfills its social, ethical and legal
responsibilities.

• Senior Leadership:

It includes the following

1. Guide the organization
2. Create a sustainable organization
3. Communicate and motivate employees
4. Focus on organizational performance

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LECTURE 3: Malcolm Baldrige - quality performance framework Strategic planning

It examines how the organization develops its strategic objectives

and how these objectives are implemented

• Strategy development
1. Determination of key strategic objectives with timelines
2. Balancing the needs of all stakeholders
3. Assessing organization’s strengths, weakness,
opportunities and threats
4. Risk assessment
5. Changes in technology trends, markets, competition and
regulatory environment

• Strategy deployment
1. Action plan development and deployment
2. Performance projection
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LECTURE 3: Malcolm Baldrige - quality performance framework Customer Focus

Determines customer requirements, builds customer

relationships and uses customer feedback to improve and
identify new opportunities for innovation.

• Customer and Market Knowledge

1. Identification and determination of target
customers and market segments
2. Using feedback to become more focused and
satisfy customer needs.
• Customer Relationships and Satisfaction
1. Acquire new customers, meet and exceed customer
expectations
2. Implement process for managing customer
complaints effectively and efficietly. 28

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LECTURE 3: Malcolm Baldrige - quality performance framework

Measurement, Analysis and Knowledge Management:

Determines how the organization selects, gathers,
analyzes and improves its data, information and
knowledge assets and how it manages its information
technology.

1. Measurement, Analysis and Improvement of

Organizational Performance:
• Performance Measurement
• Performance Analysis, Review and Improvement

2. Measurement of Information Resources, Information

Technology and Knowledge:
• Management of Information Resources
• Data, Information and Knowledge 29

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LECTURE 3: Malcolm Baldrige - quality performance framework Workforce Focus

Examines the ability to assess the workforce capability

and builds a workforce environment conductive to high
performance.

• Workforce Environment
1. Recruiting, hiring and retaining new employees
2. Managing and organizing the workforce

• Workforce Engagement
1. Fostering and organizational culture conductive to
high performance and a motivated workforce
2. Reinforcing new knowledge and skills on job

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LECTURE 3: Malcolm Baldrige - quality performance framework Process Management

Examines how the organization manages and improves

its work system and work processes to deliver customer
satisfaction and achieve organizational success and
sustainability.

• Work System Design

1. Determines core competencies of the organization
2. Identifies key work processes

• Work Process Management and Improvement

1. Implementing the work processes to ensure that
they meet design requirements.
2. Using key performance measures or indicators for
control and improvement of work processe. 31

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LECTURE 3: Malcolm Baldrige - quality performance framework Results

• The Business Results criterion examines the

organization’s performance and improvement in all
the key areas-
• Product and process outcomes
• Customer focused outcomes
• Human resource outcome
• Leadership outcome
• Financial outcome

• The performance level is examined against that of

the competitors and other organizations with
similar product offering
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 THANK YOU

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LECTURE 4: Balanced Scorecard Traditional Balanced Scorecard

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LECTURE 4: Balanced Scorecard The Balanced Scorecard

• Financial perspective: The financial perspective addresses the question of how

shareholders view the firm and which financial goals are desired from the
shareholder’s perspective.

• Customer perspective: The customer perspective addresses the question of

how the firm is viewed by its customers and whether the firm will be able to
fulfil customers’ expectations.

• Internal business process perspective: The business process perspective

identifies the processes in which the organization must excel to satisfy its
shareholders’ expectations of good financial returns and also keep its customers
happy and loyal.

• Learning and growth perspective: The learning and growth perspective

identifies the competencies that the employees of the organization must acquire
for long-term improvement, sustainability and growth.
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• Objectives
• Measurements
• Target
• Initiative
LECTURE 4: Balanced Scorecard Strategy Map

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• How will the airline company retain its customers,
and increase the CSR
• Strategy map is nothing but the balanced score card
(just different representation)
• Cause and effect added strategy map
• Ex. A production company wants to increase the
production without increasing labor and machinery
• Objectives
• Measurement
• Target
• Initiative
• Objectives: increase the quantity produced
• Measurement: quantity produced / week
• Target : 5% increase in the quantity produced
• Initiative: Product development process
optimization
• Translate strategies to measurable parameters
• Communicate the strategies to all the
individuals in the enterprise
LECTURE 4: Balanced Scorecard Measurement System

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LECTURE 4: Balanced Scorecard Strategy Management

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LECTURE 4: Balanced Scorecard Summary

The Balanced Score Card (Kaplan & Norton’s) proposes 4 generic

perspectives:

• Financial Perspective: The focus is on financial objectives

• Customer Perspective: The focus is on customer satisfaction

• Process Perspective: The focus is on operational goals and the

processes that will help realize the financial and customer
objectives

• Learning and Growth: The focus is on building employee’s

competencies, training, organizational culture, leadership, value
system, CSR (corporate social responsibilities), etc. 43

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 THANK YOU

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LECTURE 5: Enterprise Dashboard Operational Excellence

Corporate Dashboards are changing the way we look at

information and the way we analyze our business.

A well-constructed corporate dashboard answers four basic

questions:
• Where
• What
• How
• Why

Instead of wading through pages of disparate operational data,

dashboards portray critical operating and strategic information
about an organization using a collection of powerful graphical
elements. 45

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LECTURE 5: Enterprise Dashboard Corporate Dashboards

Enterprise dashboards may include:

• Bar Charts
• Maps
• Trend Lines
• Speedos
• Correlation

One quick glance at the dashboard tells users the key

performance indicators and metrics used to measure and
monitor the companies performance.

This contributes to:

• Better Analysis
• Better Tracking
• Proactive Alerting 46

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LECTURE 5: Enterprise Dashboard Corporate Dashboards

When KPI’s are exceeded, visual and email alerts can draw
attention to the right area. Further drill down to root cause
analysis instantly signals where the exception happened, and
what triggered it.

Trend Analysis : It uses historical results to predict future

outcome. This is achieved by tracking variances in cost and
schedule performance.

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LECTURE 5: Enterprise Dashboard Corporate Dashboards

Why Corporate Dashboards?

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LECTURE 5: Enterprise Dashboard Corporate Dashboards

Types of Corporate Dashboards

Enterprise performance Dashboards provide a overall view
of the entire enterprise, rather than specific business
functions.
Typical portlets in an Enterprise Performance Dashboard
include:

• Corporate financials
• Sales revenue
• Business Unit KPI’s [Key Performance Indicators]
• Supply chain information
• Compliance or regulatory data
• Balanced scorecard information
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LECTURE 5: Enterprise Dashboard Corporate Dashboards

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 Customer support dashboard
It provides customers their personal account
information pertaining to the business
relationship, such as
– Online trading
– Utility services
– Enttertainment
– B2B SLA monitoring
 Divisional dashboard
• Purchasing
• Supply chain
• Operations
• Manufacturing
• Quality control
• Marketing
• Sales
• Finance
• HR
LECTURE 5: Enterprise Dashboard Benefits

Dashboards have the following benefits:

(a) Places all critical information in just one screen rather than
flipping through the pages

(b) Improved decision making

(c) Rapid problem detection

(d) Better analysis of performance

(e) Identifies the trends and corrective actions to improve the

performance of the organization
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LECTURE 5: Enterprise Dashboard Corporate Dashboards

Steps in Creating a Dashboard

(a) Identify the data that will go into an Enterprise

Dashboard Enterprise Dashboards can contain
either/both of the below mentioned data:
• Quantitative data
• Non-Quantitative data

(b) Decide on the timeframe

E.g.: The various timeframes can be: This month to date
This quarter to date This year to date Today so far

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LECTURE 5: Enterprise Dashboard Corporate Dashboards

(c) Decide on the comparative measures

E.g.: the comparative measures can be: The
same measure at the same point in time in the past
The same measure at some other point in time in
the past

(d) Decide on the evaluation mechanisms

E.g.: the evaluation can be performed as
follows: Using visual objects e.g. traffic lights Using
visual attributes e.g. red color for the measure to
alert a serious condition
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• Don’t make your dashboard a data repository
• Avoid fancy formatting
• Limit each dashboard to one printable page
LECTURE 5: Enterprise Dashboard Summary

•Corporate Dashboards are changing the way we look at

information and the way we analyze our business.

• Corporate Dashboards contributes to:

• Better Analysis
• Better Tracking
• Proactive Alerting

•Corporate Dashboards improves accountability and

transparency across organization

•Corporate dashboards work effectively with Balanced

Scorecard implementations
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LECTURE 6: Balanced Scorecard Vs. Enterprise Dashboard

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 THANK YOU

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