Chapter 9 BUSINESS PERFORMANCE MANAGEMENT Sections 9.2, 9.8, 9.10, 9.11.
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Transcript of Chapter 9 BUSINESS PERFORMANCE MANAGEMENT Sections 9.2, 9.8, 9.10, 9.11.
Chapter 9
BUSINESS PERFORMANCE MANAGEMENT
Sections 9.2, 9.8, 9.10, 9.11
Business Performance Management• Monitoring actual performance against the goals and
objectives • BPM needs BI as its foundation
BPM Methodologies
•Six Sigma •Balanced scorecard (BSC)
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 000’s of processes are involved
*in Statistics, according to Empirical rule, almost all data falls within ±3σ of the mean
Balanced Score Card (BSC)Designed to overcome the limitations of systems that are solely financially focused
– Non-financial objectives considered in BSC: 1.Customer
2.Internal business process
3.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
BSC
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
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
Dashboard designChallenge 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
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