(5) Decision Support – how do KPIs and BI systems play their part?

You’re making a business decision. What do you need to know?

Obviously it depends on the situation at the time. But typically will include:
1. What will happen?
2. What’s been happening?
3. How it will impact the numbers that get reported?
4. How will it affect your own remuneration or bonus?

You may make a rapid instinctive decision. Or take the time to analyse the situation more carefully.

Either way, given the same applies to other people making decisions throughout your organization:

1. Are the numbers reported the correct KPIs to drive decisions that are right for the business?
2. Do management and sales team bonus and commission schemes tie in with business goals?
3. Do your systems provide suitable historical information on a timely basis? Can you see the big picture? And analyse into detail when you need to?
4. Do you have an overall forecast in mind? And have a model to test out major changes in scenarios?

Relevance of KPIs

Clearly the right KPIs at each level in the business are vital, including remuneration schemes. See earlier posts in this blog for further discussion and ideas.

What about Business Intelligence (BI) systems?

Well-implemented BI systems can provide dashboards of KPIs, analysis into detail, and models to help forecast the future.

You can use Excel, a BI tool that sits behind Excel, or a BI tool with its own user interface. Key considerations are power, ease of use, and reliability.

Excel can be good for simpler situations, but it’s easy to make mistakes. A back-end database or OLAP system is better, provided the business structure is well modeled. Costs can vary dramatically, and value for money even more so. Excel may be cheap, but often not best for value.

Next Step

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