There is a lot of buzz these days about business analytics within government agencies and private sector organizations. At its loudest, the buzz positions analytics as the key to uncovering hidden meanings and truths in your data. At a practical level, however, analytics are business metrics used to drive organizational performance. These metrics are used to support business processes and decision making and are (ideally) created in the agency’s Business Intelligence (BI) application. But if your BI application produces too many metrics and/or produces metrics not aligned with business outcomes, it might be time to chainsaw your metrics! In other words, streamline your metrics to the ones that deliver the most value to your agency and chainsaw the rest.
Aligning Your BI Initiative With Your Business Strategy
How do you know which metrics to keep and which ones to chainsaw? The first step is to review the alignment of your BI initiative with your agency’s business strategy. If your initiative is out of alignment (either because it was never aligned in the first place or business needs have changed), your top priority should be to realign it since your whole program is at risk of being chain sawed.
If your initiative is in alignment, you know the business outcomes your BI program supports. Now it’s time to focus your metrics on those business outcomes and the processes used to produce them. At the highest level, performance metrics track strategic and operational progress and consist of:
- Result Metrics measure the end result or outcome of a strategic objective.
- Process Metrics measure the processes that are used to produce the desired result.
Performance Management in Action: One Agency’s Use of Performance Metrics
Here’s an example of using performance metrics to track strategic and operation progress. One federal agency has a strategic goal to “Improve our Retiree and Other Core Services”. To achieve this goal, the agency has outlined five strategic objectives. One of these objectives is “Dramatically increase baby boomers’ use of our online retirement services”. The outcome for this strategic objective is to achieve an online filing rate of 50% for retirement applications by 2012. Therefore, the result metric is: online retirement application filing rate.
The agency further identified several initiatives that will contribute towards achieving the business outcome. One initiative is to expand the use of automated data exchanges to electronically obtain key documents such as birth certificates. Once established, this process will make the online retirement process fully electronic, thus contributing to the desired business outcome. A key process metric could be number of electronic birth certificate exchanges (along with targets and timelines). This process metric (along with others) would be leading indicators on whether the agency will meet it desired business result of 50% online filing rate.
Sharpen Your Focus on Critical Analytics
BI programs exist to improve organizational performance. BI applications create analytics in the form of business metrics to measure business processes, support decision making, and help achieve desired business outcomes. If your BI program is not aligned with business outcomes your entire program may be at risk. Chainsaw your metrics to provide the critical analytics your business users need.