Killer Analytics E-Book

Mark Graham Brown

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: SAS Institute Inc
• Sprache: Englisch

Seitenzahl: 473

Veröffentlichungsjahr: 2013

Beschreibung

Learn the secrets to using analytics to grow your business Analytics continues to trend as one of the hottest topics in the business community today. With ever-growing amounts of business data and evolving performance management/business intelligence architectures, how well your business does analyzing its data will differentiate you from your competition. Killer Analytics explores how you can use the muscle of analytics to measure new business elements. Author Mark Brown introduces 20 new metrics that can drive competitive advantage for your business, including social networks, sustainability, culture, innovation, employee satisfaction, and other key business elements. * Shows organizations how to use analytics to measure key elements of business performance not traditionally measured * Introduces 20 new metrics that drive competitive advantage * Reveals how to measure social networking, sustainability, innovation, culture, and more Aside from the science and process of analytics, businesses need to think outside the box in terms of what they are measuring and how new analytical tools can be used to measure business elements such as innovation or sustainability. Opening the doors to a powerful new way of measuring your business, Killer Analytics saves you a small fortune on consultants with dynamic, forward-thinking advice for making the most of every component of your business.

Leseprobe

Contents

Foreword

Preface

Acknowledgments

Introduction: What Are Predictive Analytics?

Part One: Operational Analytics

Chapter 1: The Innovation Index

What Is Important about Innovation?

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Mostly Worthless Innovation Metrics

Cost and Effort to Measure

How Do I Measure It?

Formula and Frequency

Variations

Targets and Benchmarks

Benefits of Data

Note

Chapter 2: The Supply Chain Index

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Cost and Effort to Measure

How Do I Measure It?

Formula and Frequency

Variations

Targets and Benchmarks

Benefits of Data

Chapter 3: The Project Management Index

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Cost and Effort to Measure

How Do I Measure It?

Process and Churn: Two Additional Metrics to Consider in a Project Management Analytic

Measuring Risk on Projects

Variations

Formula and Frequency

Targets and Benchmarks

Benefits of Data

Chapter 4: The Enterprise Excellence Index

Why Trash All These Sacred Cows?

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Cost and Effort to Measure

How Do I Measure It?

Knowledge Management Metrics

Lean or Six Sigma Metrics

Formula and Frequency

Variations

Targets and Benchmarks

Benefits of Data

Note

Chapter 5: The Risk Index

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Cost and Effort to Measure

How Do I Measure It?

Variations

Formula and Frequency

Benefits of Data

Chapter 6: The Opportunity Management Index

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Cost and Effort to Measure

How Do I Measure It?

Formula and Frequency

Variations

Targets and Benchmarks

Benefits of Data

Chapter 7: The External Factors Index

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Cost and Effort to Measure

How Do I Measure It?

Variations

Formula and Frequency

Targets and Benchmarks

Benefits of Data

Chapter 8: The Sustainability Index

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Cost and Effort to Measure

How Do I Measure It?

Variations

Formula and Frequency

Targets and Benchmarks

Benefits of Data

Note

Part Two: Customer and Stakeholder Analytics

Chapter 9: The Outcomes Index

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Cost and Effort to Measure

How Do I Measure It?

Formula and Frequency

Variations

Targets and Benchmarks

Benefits of Data

Chapter 10: The Customer Engagement Index

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Cost and Effort to Measure

How Do I Measure It?

What Factors Should Be Included in a Customer Engagement Index?

Variations

Formula and Frequency

Benefits of Data

Note

Chapter 11: The Social Network Index

Net Promoter Score: The New and Improved Survey Method

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Cost and Effort to Measure

How Do I Measure It?

Sorting Out the Beautiful from the Ugly Customers

Variations

Targets and Benchmarks

Benefits of Data

Notes

Chapter 12: The Service Excellence Index

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Cost and Effort to Measure

How Do I Measure It?

Formula and Frequency

Variations

Targets and Benchmarks

Benefits of Data

Chapter 13: The Customer Rage Index

Problems with Customer Surveys

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Cost and Effort to Measure

How Do I Measure It?

Tracking Aggravations at Different Types of Organizations

Hospital Rage Index

Advantages and Disadvantages of the Aggravation or Rage Index

Constructing the Index

Formula and Frequency

Variations

Targets and Benchmarks

Benefits of Data

Chapter 14: The American Index

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Cost and Effort to Measure

How Do I Measure It?

Variations

Formula and Frequency

Targets and Benchmarks

Benefits of Data

Chapter 15: The Corporate Citizenship Index

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Cost and Effort to Measure

How Do I Measure It?

Formula and Frequency

Variations

Targets and Benchmarks

Benefits of Data

Notes

Part Three: People Analytics

Chapter 16: The Human Capital Index

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Cost and Effort to Measure

How Do I Measure It?

Formula and Frequency

Variations

Targets and Benchmarks

Benefits of Data

Chapter 17: The Workforce Happiness Index

What Makes Employees Happy?

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

A Culture of Weirdness and Fun

Cost and Effort to Measure

How Do I Measure It?

Net Promoter Score

Using Social Media to Track Employee Happiness

Formula and Frequency

Variations

Targets and Benchmarks

Benefits of Data

Note

Chapter 18: The Culture Index

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Pets before Profits: Purina’s Corporate Culture

Cost and Effort to Measure

How Do I Measure It?

Variations

Formula and Frequency

Targets and Benchmarks

Benefits of Data

Note

Chapter 19: The Distraction Index

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Cost and Effort to Measure

How Do I Measure It?

Formula and Frequency

Variations

Targets and Benchmarks

Benefits of Data

Chapter 20: The Corporate Wellness Index

Types of Organizations Where This Metric Is Appropriate

How Does This Impact Performance?

Halfhearted Approaches to Wellness

What Really Works: Tough Policies

What Really Works: In-House Health and Wellness Centers

What Really Works: Hiring the Right People

Cost and Effort to Measure

How Do I Measure It?

Variations

Formula and Frequency

Targets and Benchmarks

Benefits of Data

Note

About the Author

Index

WILEY AND SAS BUSINESS SERIES

The Wiley and SAS Business Series presents books that help senior-level managers with their critical management decisions.

Titles in the Wiley and SAS Business Series include:

Activity-Based Management for Financial Institutions: Driving Bottom-Line Results by Brent Bahnub

Big Data Analytics: Turning Big Data into Big Money by Frank Ohlhorst

Branded! How Retailers Engage Consumers with Social Media and Mobility by Bernie Brennan and Lori Schafer

Business Analytics for Customer Intelligence by Gert Laursen

Business Analytics for Managers: Taking Business Intelligence beyond Reporting by Gert Laursen and Jesper Thorlund

The Business Forecasting Deal: Exposing Bad Practices and Providing Practical Solutions by Michael Gilliland

Business Intelligence Success Factors: Tools for Aligning Your Business in the Global Economy by Olivia Parr Rud

CIO Best Practices: Enabling Strategic Value with Information Technology, Second Edition by Joe Stenzel

Connecting Organizational Silos: Taking Knowledge Flow Management to the Next Level with Social Media by Frank Leistner

Credit Risk Assessment: The New Lending System for Borrowers, Lenders, and Investors by Clark Abrahams and Mingyuan Zhang

Credit Risk Scorecards: Developing and Implementing Intelligent Credit Scoring by Naeem Siddiqi

The Data Asset: How Smart Companies Govern Their Data for Business Success by Tony Fisher

Delivering Business Analytics: Practical Guidelines for Best Practice by Evan Stubbs

Demand-Driven Forecasting: A Structured Approach to Forecasting, Second Edition by Charles Chase

Demand-Driven Inventory Optimization and Replenishment by Robert A. Davis

The Executive’s Guide to Enterprise Social Media Strategy: How Social Networks Are Radically Transforming Your Business by David Thomas and Mike Barlow

Executive’s Guide to Solvency II by David Buckham, Jason Wahl, and Stuart Rose

Fair Lending Compliance: Intelligence and Implications for Credit Risk Management by Clark R. Abrahams and Mingyuan Zhang

Foreign Currency Financial Reporting from Euros to Yen to Yuan: A Guide to Fundamental Concepts and Practical Applications by Robert Rowan

Health Analytics: Gaining the Insights to Transform Health Care by Jason Burke

Human Capital Analytics: How to Harness the Potential of Your Organization’s Greatest Asset by Gene Pease, Boyce Byerly, and Jac Fitz-enz

Information Revolution: Using the Information Evolution Model to Grow Your Business by Jim Davis, Gloria J. Miller, and Allan Russell

Manufacturing Best Practices: Optimizing Productivity and Product Quality by Bobby Hull

Marketing Automation: Practical Steps to More Effective Direct Marketing by Jeff LeSueur

Mastering Organizational Knowledge Flow: How to Make Knowledge Sharing Work by Frank Leistner

The New Know: Innovation Powered by Analytics by Thornton May

Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics by Gary Cokins

Retail Analytics: The Secret Weapon by Emmett Cox

Social Network Analysis in Telecommunications by Carlos Andre Reis Pinheiro

Statistical Thinking: Improving Business Performance, Second Edition by Roger W. Hoerl and Ronald D. Snee

Taming the Big Data Tidal Wave: Finding Opportunities in Huge Data Streams with Advanced Analytics by Bill Franks

Too Big to Ignore: The Business Case for Big Data by Phil Simon

The Value of Business Analytics: Identifying the Path to Profitability by Evan Stubbs

Visual Six Sigma: Making Data Analysis Lean by Ian Cox, Marie A. Gaudard, Philip J. Ramsey, Mia L. Stephens, and Leo Wright

Win with Advanced Business Analytics: Creating Business Value from Your Data by Jean Paul Isson and Jesse Harriott

For more information on any of the above titles, please visit www.wiley.com.

Cover photography: © pzAxe/Alamy

Cover design: Michael Rutkowski

Copyright © 2013 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Brown, Mark Graham.

Killer analytics : top 20 metrics missing from your balance sheet / Mark Graham Brown.

pages cm — (Wiley and SAS business series)

Includes index.

ISBN 978-1-118-63171-3 (hardback); ISBN 978-1-118-69173-1 (O-book); ISBN 978-1-118-73778-1 (e-book); ISBN 978-1-118-73780-4

1. Organizational effectiveness—Evaluation. 2. Performance—Management. 3. Industrial efficiency—Evaluation. I. Title.

HD58.9.B762 2013

658.4'034—dc23

2013017382

This book is dedicated to my wife, Holli Brown.

Foreword

Insights and knowledge lead to better decisions and it is those better decisions that lead to improved business performance. Companies that outperform their peers are those that underpin their decisions by facts, data, and analytics. I call those companies intelligent companies and believe Killer Analytics: Top 20 Metrics Missing from Your Balance Sheet by Mark Graham Brown will help any business become more intelligent. More intelligent analytics are no longer a nicety to have but a required core competence that enables any company to compete in today’s data-driven world. Enterprises without the right analytics will simply be outsmarted by their competitors and left behind.

In the past, the challenge for intelligent companies was to find data, any data, to shine some light on current performance and inform decision making. It often involved creating simple ways of counting things in order to get better insights and understanding of the business. Today, the challenge is picking the right metrics from the ever-growing mountain of data. We no longer have a data shortage, we have the opposite: a data explosion. Just digest this recent quote from Google’s executive chairman Eric Schmidt: “From the dawn of civilization until 2003, humankind generated five exabytes of data. Now we produce five exabytes every two days . . . and the pace is accelerating.”

Under this backdrop of ever-growing data volumes it becomes more critical than ever that companies are able to distill information down into meaningful insights. What I love about this book is that it goes beyond the oversimplified descriptions of metrics I see every day and digs deeper into analytics that provide real business insights. It provides managers with powerful ways of combining data points—qualitative and quantitative, past, present, and future—into indices and analytics approaches that generate more intelligent insights.

My own experience of working with many of the world’s best-known enterprises shows the need for books like this one. Every day I see companies that are drowning in data while thirsting for insights. Most companies experience information overload where managers get bombarded with data, key performance indicators, and metrics, often presented in phone directory–type reports and cluttered management dashboards. What companies don’t need are more metrics; instead they need fewer and, more important, smarter analytics that really help them answer their most critical business questions. I call them key performance questions and believe they are crucial to better information and analytics. For each analytics approach presented in this book, Mark provides a list of questions they will help answer. This is an excellent starting point for choosing the right metrics and analytics approaches for any business.

The other phenomenon I see in practice is that companies have invested in business intelligence, dashboard, or analytics software solutions with the hope of providing managers with better insights and decision-making tools. The problem is that many simply automate the reporting of the oversimplified metrics and then wonder why there is so little payoff. In the information technology (IT) world, the phrase “Garbage in, garbage out” is well known, and it couldn’t be truer for performance reporting and analytics solutions. This book will help companies sift through their mountains of data, separate out the garbage, and find the relevant metrics to inform key decisions. Any company with existing dashboard, business intelligence, or analytics solutions can use this book to give it the focus it needs for reporting.

At the Advanced Performance Institute we have just completed the world’s largest study on how companies measure and manage business performance. Responses from over 3,000 companies covering most regions of the globe show us that the majority of companies are still struggling with measuring and analyzing business performance. However, those that do it well gain valuable insights, make better decisions, and ultimately outperform their competitors. As part of the research, we created a maturity model that allows us to categorize how mature companies are in their approaches to measuring, analyzing, and managing performance. We found that most companies fall into one of two categories:

1. Data and facts. Where companies have facts and data, but the collection and usage of data is ad hoc, sporadic, and uncoordinated, leading to very limited insights.

2. Information. Where companies collect data and produce reports or dashboards in a more structured approach, which leads to some useful information.

However, the most mature companies and those that clearly outperform others use performance data to make better operational and strategic decisions and develop strategic foresight and predictions for the future. Those companies leverage their data analysis to look into the future through predictive analytics. The good news is that most analytics approaches described in this book are forward looking and predictive of future financial performance.

What’s interesting, we also identified a number of things companies at the highest level of business performance management maturity have in common. So, what differentiates so-called intelligent companies from not so intelligent companies? Here is the list of seven factors:

1. Companies combine traditional measures of performance such as net profit margin, EBITDA, or economic value added with analytics approaches that are more dynamic and use wider and larger data sets—exactly the type of analytics introduced in this book!

2. Companies integrate strategic and operational approaches to create a closer link between the strategic business outcomes and the operational drivers of performance. Again, a point well supported in this book.

3. Companies focus more on the here and now as well as the future, rather than the past. Traditional metrics look backward while more sophisticated analytics approaches leverage the ability we have today to bring in real-time measures and predictive analytics tools. Another point made in this book.

4. Companies create a real focus on data quality to ensure that the input into their analytics approaches and performance metrics are reliable. Those at the highest level of maturity proactively manage data-quality throughout the organization. References to the need for good quality data are made in many places in this book.

5. Companies use technology to support their analytics and performance reporting. Instead of turning it into an IT project, companies use IT systems and tools effectively to provide integrated platforms with the ability to perform predictive and big data analytics and enable companies to visualize relevant information in interactive graphs and reports delivered to decision makers via mobile devices or over the Internet.

6. Companies use analytics and metrics to improve internal decision making and not primarily to showcase externally how well they are doing. There is a difference in the type of metrics and analytics approaches used to really understand your business and identify the things that need attention compared to those that just exist as a box-ticking exercise. The analytics in this book are not simply there to generate a good marking message but will help companies identify many of the real performance issues.

7. Companies achieve real buy-in for analytics and performance reporting right throughout the organization—from the boardroom to the shop floor. A lack of buy-in for analytics often stems from the fact that the wrong measures are being used and irrelevant data is being shared. People at all levels of the organization will only buy into analytics and take some ownership for it if it is valuable to them and if it is generating insights that will lead to better decisions and improved performance. The purpose of this book is to achieve exactly that.

I am sure that like me, you will find this book extremely useful, practical, and engaging. It will enable you to enhance the portfolio of analytics and metrics in your company with more insightful and relevant ones in order to become a more intelligent and high-performing enterprise.

Bernard Marr,

Chief Executive Officer, Advanced Performance Institute, author of The Intelligent Company and Key Performance Indicators: The 75 Measures Every Manager Needs to Know

Preface

Leaders need a constant stream of information to steer their organizations down a path of success. Being able to detect little problems or challenges before they escalate into bigger ones is a key requirement for managing organizational performance.

Too many managers today rely on anecdotal data or no real data at all, with only lagging financial and operational measures to look at to see how things are going. This book is not about measuring financial performance. There are plenty of books about that. It is rare that I encounter an organization that does not have good solid operational and financial metrics. This book is about measuring the stuff that most organizations struggle with. The ultimate goal in most organizations is financial success: growth, profits, share price, and return on investment are certainly important, but many other things are prerequisites to achieving those financial goals. Reviewing financial and operational performance against targets is extremely important. However, the root causes of failures or missing your financial targets are usually other dimensions such as dissatisfied customers, unhappy employees, external factors, poorly performing suppliers, legal and regulatory issues, or failure to bring in quality new customers.