Business Intelligence (BI) has been an option in the market for a while and thanks to it, we are able to do real business wonders. From monitoring and interpreting a great amount of data, to analyzing behaviors and trends to detect business opportunities, and solve problems that would be practically impossible through traditional ways.
Nevertheless, for the BI tools to work properly they require adjustments that start in the compliance and execution of the planning. To this effect it is necessary to define Performance Indicators through Key Performance Indicators (KPI). Then, if you want to enhance the performance of your business, you need to optimize your Performance Indicators with BI and KPIs.
Now, to define the adequate performance indicators as well as the KPIs for your business demands a complex and tedious process. Below are some key points to determine which indicators you should take into consideration, which not, and how to get the best of the BI and KPIs combination.
BI and KPIs: performance indicators for making informed decisions
The main duty of performance indicators is to advise and set a pattern of what is desired, optimum, acceptable, capable of improvement, and unacceptable in terms of the administration and delivery of services for the internal and external customer.
In this sense, BI and KPIs are a type of referee that indicates performance failures and problems that positively or negatively have an impact on the delivery of services. This facilitates the early detection of problems and to prioritize areas that need improvement.
The detail with the combination of BI and KPIs consists in the many ways it can be approached:
BI and KPIs
As a matter of principle, the most effective and recommended way is to limit it. Generally, business have difficulty in identifying the best performance indicators and, in an effort to address up to the minimum detail, they fill-up with KPIs that are really not pertinent for their real purposes.
As experts in the area, our recommendation is to be sincere and limit the amount of KPIs. Around 10 gather what it is really necessary to manage the main activities of your business.
Often they are basically: supply chain management, sales and marketing, customer service and satisfaction, and commercial viability.
Now, KPIs for the financial area will be different than those necessary for customer service. Nevertheless, there are performance indicators that are common among all the sensible areas of your business:• Operational cost reduction.
• Asset management to promote revenue growth.
• Business sustainability to create relations of value with the oldest clients and attract new ones.
• Improve the ROI (Return of Investment).
• Performance reports for analysis and comparison of results.
It is here where the BI tools take the spotlight for planning and organizing the KPIs and vice versa. Let us see how:
1. Identify main objectives of your business
With the business objectives what happens is that business focus so much on the little things that the end up deviating from the big picture. Then, to discriminate your real objectives, identify:
• Which factors improve compliance
• Which factors harm compliance
2. Create a data model to improve performance based on BI and KPIs
With the objective of improving and enhancing your general performance, you must be sincere regarding your business management model. For this, answer these two questions:
The answers that you give to those two questions will help you establish the critical functions of your business. This way, you will prove which data works better to perfect the decisions that your make.
From this main filtering process, you will obtain an acceptable number of criteria to determine the optimal KPIs to improve the general performance of your business
The rest of the data, nevertheless, is also useful to improve the selection criteria of KPIs: The ones that will tell you what works better, what is less convenient, and what is redundant for the process. In summary, this additional data will help you identify:
• Extra dimensions to consider for other important processes.
• Eliminate administrative noise.
• Include necessary processes and facts of concurrency.
• Add data.
3. Develop the corporate culture based on BI and KPIs
Lastly, you must keep in mind that if it is true that BI and KPIs base their success in data concurrency, it is also true that they can be used to mold and develop a corporate culture.
In this sense, BI and KPIs work as a subtle weave to motivate your employees to reach their ideal and optimum business goals that act positively in the enhancement of your business performance.
At Fusionworks we have the best BI tools for you to guarantee business success. Look at our options to correctly analyze and monitor your data and create a corporate culture towards success. Click here to request a free demo today.