KPI: Your Metrics Should Tell a Story

[ILLUSTRATION OMITTED] There is a cluster of acronyms swirling around the key performance indicator space--BI, BAM, BPM, EDM, and EMM--standing for business intelligence, business activity monitoring, business performance management, enterprise decision management, and enterprise metrics management, respectively. [ILLUSTRATION OMITTED] Broadly speaking, all provide "insight data" that supports the steering of the bureaucratic complex that many companies, banks included, have become. As you might expect, getting to know and love these tools is more complicated than such simple definitions would suggest. Applications keep evolving, and, in some cases, blending attributes. Most recently, business consultants in search of alignment and their clients have been asking that metrics deliver real-time results (or close to it); become web-based (or at least portal accessible) and selective. Sounds good in theory, but in practice, are metrics delivered that way strictly necessary, or merely nice to have? Talk to optimists and they'll say web-based key performance indicators are rapidly coming into their own. Gartner's 2007 CIO Survey indicated that business intelligence, for example, was still a number one priority. Strictly speaking, real-time requirements come from BAM vendors such as SoftwareAG (via its takeover of WebMethods) working alongside of--or embedded into--business process management systems designed to support process configuration, design, and workflow. Still, business intelligence vendors such as Oracle and SAS rightly claim that they can deliver information about performance. If all of this is starting to seem confusing, simply think of the entire caboodle as having the potential to feed into the ultimate digital dash. What's up? What's down? What's in line? Who has good numbers? Who needs improvement? What process works? What process stinks? After all, most managers believe it would be nice to see it in a framework without delving into too many stacks of reports. The idea here, experts say, is to generate a dashboard that reflects the key activities of your bank, and tell a story of sorts about it: If the "narrative" is upbeat, indicative of great fortune, terrific. If it's not, you can adjust. Leaders use them now While not in mass adoption, optimists further explain, digital dashes that yield both financial and operational information are being used by leading banks to manage everything from the uptime of infrastructure to the response time of customer service reps. So a manager can begin to look at, say, the average response time to open an account or the number of mortgages sold or the correlation, between checking accounts, savings accounts, attrition rates, and next product cross-sold. Much of the information is visual and electronic reports can be "drilled down into" showing linkages between the product and customer perspectives on sales that standard paper reports can miss. And what of all those acronyms and seeming differentiation: If you get one tool set, do you need another? As with most applications in IT, what you need depends on what you need to do, and if you want to start small and grow or rollout a more enterprise-oriented effort from the start. One way to look at the space, according to Technology Evaluation Centers, Inc., a firm that does evaluations, is that business intelligence comes out of the reporting and online analytical processing (OLAP) tradition and can generate bread and butter KPIs such as the number of units sold and profitability of each type of product. There are more established tools, which include SAP, Oracle, and Cognos BI offerings. (Cognos has just announced a new enterprise product suite that combines traditional BI with business performance management). Newer web-based tools promise, in part, to extend to IT administrators the ability to develop end-user report capability as well as the development of OLAP "cubes," that is, a specially designed database optimized for reporting, as well as analytics and performance management applications. …