Improving key metrics is crucial for your organisation to surpass its G&O (Goals and Objectives). While this is conceptually obvious very few manage to realise an evolving and connected framework. We often see businesses thrown off course by metrics being too generic. Vanity metrics are also great for our corporate ego, but hold little real world value. In an environment where the sheer enormity of data noise can be deafening, well planned actionable reporting and KPIs (Key Performance Indicators) offer a considerable competitive edge. Achieving this isn’t always intuitive, therefore few ever do.
Most traditional reporting approaches generate passive output. This can add interest and context but does not adequately empower a business to reach or surpass its goals. The increasing popularity of visualisation tools has led to a surge in software, as well as consultants who are understandably eager to show off their latest shiny new toy. Building this way can shift focus to the colour and availability of the bricks rather than the overall design, purpose and applicability of the resultant building. It’s an age old IT oxymoron, reporting that embraces effective simplicity is often the most complex to both conceive and implement.
Below are ten crucial aspects that embody 4Front’s approach. Each one is vital when creating actionable reporting to genuinely accelerate profitability and growth.
Align your priorities
Your priorities must align with those of the stakeholders and management. This ensures you all share the same vision moving forward, and have the resources available to facilitate strong accountable and actionable metrics. Failure to align your priorities can lead to a protracted and exasperating process with underwhelming results.
New visualisation tools and sensationalist pre-canned demos can be very seductive and leave stakeholders hungry for results. They can also trivialise the effort required to create actionable corporate solutions. The temptation to dive straight in or simply add tools as a veneer to existing EUAs (End User Applications) can be strong. It’s important at this stage to go the extra mile. Build a solid understanding of what is needed by asking key questions. Consider feasibility and build cohesive cross-team plans. Having a collective understanding where you gather, gauge, govern and manage active metrics will drive the strong actionable results.
Goals and Objectives must be SMART (Specific, Measurable, Achievable, Relevant, Time-related). The SMART approach ensures actionable metrics are more comprehensible and transparent. The Time-related G&Os should be divided between Short-Term and Long-Term. Steer clear of monitoring KPIs difficult to influence or regulate as they make poor candidates for actionable metrics.
Less is more
The temptation to amass as many KPIs as possible, with the view it will provide a comprehensive set of actionable measures, will distract your focus and be costly and ineffective. Less is more. A few well-defined KPIs will help keep the actionable element strong and transparent, and provide a clear understanding of the impact on what matters.
Analysis requires a plainly defined hypothesis with believed statements of cause, effect and reasoning behind them. The resulting analysis of KPIs must be able to tie the findings to impact. Hypothesis validation helps achieve a greater understanding of the different facets of the impact behind the numbers and implement meaningful action as a result.
When the panel of stakeholders is represented by a number of different divisions, such as regional or product based departments, segmentation will play a key part in relevant actionable deliverables. Defining different segments that have some attributes in common is important in cases where a belief ‘one size fits all’ simply isn’t true. Various stakeholders may have different questions to address and action. Filtering, grouping and segmenting the data plays a vital role in assessing key actionable measures of relevance.
Every key metric should have a target. The KPIs with the most actionable metrics are those that have a target or forecast for comparison, providing context and meaning.
Ensuring actionable data is dependable and validated should be a top priority. A more efficient route to action means misinformation carries higher consequences. Incorporating automated data quality processes, covering everything from enrichment, verification, and issue alerts is essential and a prerequisite to publishing any actionable measures. This doesn’t mean actionable KPIs should always wait until being confirmed as 100% correct before being distributed, the true accuracy and completeness of the data should be recognised and appreciated.
Time is not only a core element in whether something is short, medium or long-term, but also in many cases it’s key for actionable data to be seen as time series. Forecasts and targets are normally pinned to periodic intervals, and as such actionable measures should at least be viewed with the same frequency. Analysing as time series is a significant factor in detecting trends and patterns that help predictive analytics, potentially allowing preemptive action to be taken.
Testing and Iteration
The best actionable pathway will be iterative. Consistent testing of hypotheses, and the effectiveness and practicality of actionable elements, requires a fluid approach. Adapting to small incremental changes to suit your key metrics can be key to optimising actionable measures that ultimately deliver your core G&Os.
Successful implementation of effective and actionable analytics reporting is dependent on all of the above factors. The degree of relevance of each factor will vary depending on each organisations own structure.