Crystal clear

How do you streamline performance management? With a dashboard. How do you dig into areas that warrant further exploration? With data visualization.

By Sandra Gittlen

Consider this: A pipe and supply company in the Pacific Northwest recently found out that its top revenue-generating customers were not its most profitable.

While this notion might take a second to get your arms around, for companies employing performance management tools with data visualization, it’s crystal clear.

The company used the activity-based modeling within SAS’ performance management solution to analyze customer profitability. Company leaders quickly found, via a rich graphical representation, that salespeople were spending so much time with their “best” customers that they were draining significant resources from the organization.

Today, companies of all sizes are seeing the value performance management tools bring to business intelligence initiatives. While straight BI can provide insight into a specific issue, performance management tools leverage the same techniques to provide a holistic view of an organization. This next level, where business intelligence and performance management mesh, is sometimes referred to as BiPM, BPM or simply PM.

SAS’ unique approach to analytics enables companies to reach this next level – going beyond static charts and Excel spreadsheets to deliver multidimensional representations of critical data. With this unparalleled visibility into their data, companies can make real-time, market-leading decisions.

The foundation of this approach, the SAS Enterprise Intelligence Platform, offers users powerful data integration, advanced analytics, optimized intelligence storage and a broad set of business intelligence capabilities. This platform is an integrated, flexible, standards-based, centrally managed intelligence environment that empowers organizations to optimize their decision-making processes through meaningful intelligence from consistent, companywide data.

“It’s been an evolution. The first step companies took with business intelligence was to look at performance management to help them manage their budgets. The next step was to give users direct access to BPM tools. Now, companies are using BPM tools with enhanced data visualization so that even users [who] are less familiar with analytics can grasp important trends and make critical decisions,” says John Colbert, a Vice President at BPM Partners, a consultancy in Stamford, Connecticut.

Survey says: Data visualization is key
Performance management tools enable companies to define strategic goals and then plan, measure and manage their performance against those goals. They feature a variety of components – including real-time, Web-based dashboards that alert users to important changes and trends – to help businesses link their financial and operational data and create solid, forward-thinking strategies.

This year, half of the respondents to BPM Partners’ BPM Pulse Survey of more than 500 executives from a cross-section of industries reported they already have performance management initiatives in progress. About 10 percent of respondents said they have plans to implement performance management in the short term.

The survey respondents ranked dashboarding, which proactively delivers information to users based on customized key performance indicators (KPIs), as one of the top three components they rely on. The executives also named data visualization as the second most important feature of performance management.

“This shows a huge leap for companies that understand there is richness in their data, but don’t know how to help employees who don’t have the sophistication of training to access that data,” Colbert says.

With the SAS Enterprise Intelligence Platform and the BI and performance management solutions that run on that platform, companies can automate their planning, budgeting, management reporting, financial consolidation, business process management and operational performance management. Results are generated from business-specific KPIs via the dashboard, portal or other customizable feature-rich display.

The data appears in various formats, including color-coded temperature charts and “data movies” that allow users to manipulate an easy-to-use, motion-enabled, graphical environment. These movies and other unique graphical representations are powered by SAS’ patented JMP^® statistical visualization and discovery software. “Dashboards and data visualization help users to focus on what they know is important and to consume information more quickly,” says Charles Pirrello, Product Manager for dashboards and scorecards at SAS.

Getting to the cause of performance problems
However, Pirrello adds that dashboards are only a first-alert system and should lead users to more discovery. “It’s like saying, ‘We have a problem, and you need to pay attention.’ Their true value is the ability to get users to dig deeper and uncover causes of poor performance using the underlying analytics tool,” he says.

Dennis Drogseth, Vice President at Enterprise Management Associates, a consultancy in Boulder, Colorado, says dashboards can be incredibly beneficial to business users. “They can provide a single pane of glass where users can see what changes are occurring, why they’re occurring and how they impact business performance,” he says.

He adds that this information, delivered through concise graphics, is essential for companies that want to assimilate disparate pools of information, such as that flowing from their ERP, CRM and other systems. “You have all these piles of data that need to work together. Whether it’s for problem solving or service impact and automation, this merging of historical and real-time data is powerful,” he says.

John Burke, Senior Analyst at Nemertes Research in Minneapolis, Minnesota, says that getting a “clean” or “single” version of data is one of the most difficult challenges organizations face, but not doing so can jeopardize performance management efforts. He says, “The hardest part is figuring out what really qualifies as a key performance indicator.”

For instance, he says for a retailer, it might be the difference between the number of sales at close or the number of transactions per shift. “These subtleties can get very complicated,” he says. Burke recommends that business leaders, not IT, determine these parameters.

It’s all about data integrity
In addition to having “clean” data, the ability to pull all that data together with top-notch analytics is just as important, according to SAS’ Pirrello. For instance, he says, a state agency was patting itself on the back for having a significant drop in car accident deaths. The agency credited its own accident prevention program. However, had the agency looked at the whole spectrum of data available, including a 20-year span of statistics, it would have seen that every few years the number of accidents dipped. Pirrello says, “Yes, the numbers they had were accurate, but they weren’t looking at the whole picture. Reports and queries will give you what you want, but to get the ‘truth’ you need analytics.”

In the case of the pipe and supply company mentioned earlier, SAS’ performance management and visualization tools let its leaders see the profitability costs assigned to each customer. The tools measured how much it cost the firm for the sales force to spend money on activities associated with customers. “Until the company saw this profitability metric, the leaders had no idea these were not their best customers,” Pirrello says.

He adds that performance management is not just a sales tool. It can be used across all departments, including IT, human resources, finance, customer intelligence, marketing and procurement.

For example, a doctor in Children’s Services at Duke Medical Center, who had no financial background, used a JMP-enabled dashboard to analyze his billing process. “He found discrepancies and inefficiencies that led him to improve revenue 10 percent to 15 percent over the previous year,” Pirrello explains.

In addition to reconciling historical transactions, companies can use SAS and JMP visualization tools to create what-if scenarios that help them plan for future costs and resources. “With visualization, you’re not only able to see current values, but you can see how they move through time – the direction and velocity of how they’re progressing,” Pirrello says. “You not only see where you’ve been, but also where you’re going.”

Bio: Sandra Gittlen is a freelance writer in Northborough, Massachusetts.