Business Intelligence Basics: Having a Target/Goal
“Business intelligence” can be a term that has a rather generic meaning, meaning many different things to many different people. Throughout all these definitions there is generally one central theme: That of providing timely information to decision makers such that they can make decisions that help drive the organization towards its goals.
You can see this in documents such as http://www.microsoft.com/office/preview/solutions/bi/top10.mspx and http://www.microsoft.com/sql/solutions/bi/overview.mspx
One of the popular implementations of business intelligence today is the “Balanced Scorecard”. The “Balanced Scorecard” concept was introduced by Kaplan and Norton and focuses on measuring the performance of the organization versus goals in four areas: Financial, Customer, Internal Business Processes, and Learning and Growth. (See http://www.valuebasedmanagement.net/methods_balancedscorecard.html.)
A basic example of a balanced scorecard, showing a comparison of actual and target, as implemented by Microsoft Office Business Scorecard Manager 2005, can be seen here.
So, we know that business intelligence is supposed to help us make decisions in line with our goals. We know that our scorecards probably need to show the goals against which performance is being measured. Yet, it seems that the goals are so often taken for granted or even completely ignored.
As an employee and consultant outside of Microsoft, I have worked with organizations for which their goals in very important areas were at best ambiguous and at worst missing. They may have the concept of managing to the minimum. “Get the bug list as small as possible,” for example. But they may not have a concept of what is acceptable. “We will ship when the bug list is x size.” (This is not Microsoft.)
They may manage to a trend. “Is it going up?” for example. But they may not have a concept of an acceptable rate. If your high-tech company had been returning a relatively healthy growth rate of twenty percent in 1998, you would have still been under-performing your competition. (See NASDAQ Rate of Change.)
Tracy Brinkmann, goal setting and success coach, says 'You must have an aim, a vision, a goal. For the man sailing through life with no destination or "port-of- call', every wind is the wrong wind'.
We can also take goals for granted at a technical level. If you create an automated scorecard that compares goal versus actual, you are going to need the goal. You are going to need the goal at an organizational level, time dimension, and unit of measure consistent with the actual value from your operational systems. Where is that going to come from? Does it exist in an accessible data store? How is it being collected? Who is responsible for it?
In subsequent blog entries, I’m going to explore goal setting in the context of business intelligence a bit more.
I welcome your comments.
