Choosing the Right Business Intelligence Tools for Your Data and Architectural Needs

This presentation takes you through the steps of understanding your business intelligence needs and identifying the right tools for you. We discuss the different types of BI tools. We to discuss the criteria for selecting each type of tools. We to discuss popular Business Intelligence vendors and how to rate them. And we are going to discuss the job functions and responsibilities for a typical BI implementation

Choosing the Right Business Intelligence Tools for Your Data and Architectural Needs

View more presentations from Victor Holman.

10 Ways to Keep Executives Focused on Performance Management

Have you ever tried to launch a performance improvement plan, but didn’t have enough support from executive management? Chances are the initiative lacked focus, direction, and ultimately was unsuccessful. This is because executive management plays the biggest role in keeping leaders within the organization focused on what’s important…and that’s improving performance, increasing productivity, and sustaining growth. Truth is, all executives want these things, but often performance improvement is lost among the myriad of organizational objectives. This is why it’s important for performance management teams to learn effective techniques for keeping organizational performance on the forefront. This article focuses on techniques for getting support from senior executives and keeping leaders focused on organizational performance management.

Keeping senior management and executives focused on performance management can prove to be extremely challenging, especially with their busy schedules. This can be accomplished by keeping the topic of performance management in front of executives, keeping them involved with the initiative and informing them of performance management successes.

Keep the Topic of Performance Management In Front of Executives

This may seem simple, but if executives are not constantly reminded of the value that your performance management initiative will bring to the organization, performance management will get lost among all the challenges and obstacles that are put in front of them. Remember, these are the people who have the authority and influence to get things done. You are competing with the other important initiatives that are taking place within your organization.

Keep Executives Involved With the Performance Initiative

Once the leaders within the organization are focused on performance management, you have to keep them involved with the initiative. This is done by getting them to clearly state what their objectives are and what exactly they are trying to accomplish. This is especially important in organizations where executive management changes or where there are changes in the organizational structure. Don’t assume that you know what senior management objectives are. Often times, when there is new management and changes within the organizational structure, there are also changes in what is perceived as most important. Remember, every executive would like to leave a legacy. Find out what that is and identify how you can measure their successes.

Keep Executives Informed of the Performance Improvements and Successes

Senior management and executives love to hear about successful performance results, for these results are direct reflections of their impact to the organization. Find a way to quantify their efforts and they will be on board for other ideas you bring in front of them. Do this by highlighting successes in executive management initiatives, strategies and other influences. By the way, executives are not the only ones who benefit from positive performance information. When employees are made aware of their impact on the successes of the organization, they become more open to the idea of performance managers coming in and providing input as to how they can perform better. Hopefully, they are rewarded for their contributions and strong performance. But it all starts from the top. If executive management is not on board in the first place, neither will the employees who execute their plan.

Now that we’ve discussed the importance of getting executives focused on a performance management initiative, let’s discuss four techniques for successfully maintaining this focus.

Setup Meetings With Executive Managers

This seems like such an obvious step, but you’d be amazed at how many organizations have performance management programs that do not get the exposure and support it needs from senior management. With the busy schedule of executives, it’s easy to get put on the backburner. This is where you have to be persistent. You’ve already shown them the value of performance management and how it can support their objectives. Now you just need to maintain focus. Setup weekly or monthly meetings with executives. By getting on their schedule with regular meetings you’ll keep performance fresh on their minds.

Deliver Presentations to Executives That Highlight Your Organization’s Greatest Performance Challenges

This is where you sell executives on the value of the performance initiative. Create powerful presentations that not only illustrate how well the organization is performing, but also illustrate what the specific obstacles that confront the organization. Remember, anybody can gather performance data. Your responsibility as a performance manager is to present the data in a way that clarifies what the challenges are and how to overcome those challenges. Gathering the data is a science, but displaying that information so that executives can better understand what makes the organization go and what’s holding the organization back is an art.

Communicate Which Divisions / Service Areas Are Not Aligned to Executive Goals and Objectives

Performance alignment is the single, most important aspect to successfully executing a performance strategy. Unless performance is in alignment to organizational goals and objectives, the organization will be limited in executing the overall strategy. Executives know this very well, which is one reason the Balanced Scorecard has amassed so much popularity and become a common word in the business world. If you can communicate to executive management how well the organization is or is not aligned to the organizational goals and objectives, you will definitely get their attention and their time. But be careful as to how to display this information. As I have written in other articles, how you present performance data, especially poor performance, plays a major role in gaining employee acceptance. While executive management wants to know about these shortcomings, it is only fair and good practice to make sure that the groups that you are reporting on have been involved in the process and have access to your findings. Remember, performance management is only successful if everybody is on board. It is our job as performance managers to balance the negative perceptions, and sometimes egos that come with the performance initiative.

Deliver Supplemental Training and or Workshops on Specific Topics

While executive management makes the key decisions, it’s the employees that drive performance. Therefore , it’s critical that they understand, at a minimum, the basics of performance management, such as understanding organizational objectives, baselining performance, setting goals, and applying performance measures. The biggest mistakes many performance management teams make is that they carry the performance challenges on their shoulders, often defining all of the metrics, and developing the performance plans, which minimizes employee and management input. They understand what drives the business. Increase employee input and feedback by facilitating informational performance management workshops. Teach them about key performance indicators and how to develop winning performance metrics, how they will benefit, and how their contribution impacts the organization. Explain the objectives of executive management. Reassure employees that this is not an exercise to judge their performance and tell them how to do their job. The focus should be on improving performance and empowering everybody to grow. Have problem-solving sessions that address the challenges, bottlenecks and obstacles that limit performance. Remember, a high performing organization is a collective state of mind; a culture.

We’ve discussed what you , as a manager, must do to keep executive management and organizational leaders focused on performance management. We’ve discussed how you can get employees on board and in a high performance mindset. Now, let’s take a look at three things that executives can do to support your initiative and ensure organizational performance success.

Have Executives Reiterate Their Support of the Performance Initiative to the Organization

As mentioned earlier, this is the key to getting employees on board for the performance initiative. When executives make performance a priority, employees follow. Have executives send emails, hold town hall meetings, distribute flyers and anything else that sends the message that performance will be on their radar.

Have Leaders Provide Feedback on What Performance Areas They Feel Are Most Important

We should always be measuring how well the organization is reaching organizational goals. This will always be valuable to executive management. But, just as the organization is constantly changing, so is what’s important to executives on any given day. For example, if your organization is implementing an enterprise-wide application or other initiative, the success of that migration will be very important to senior and executive management. During that time, they will want to know how well the migration is going and how customers (employees in this case) perceive it.

Have Executives Re-evaluate Organizational Objectives Regularly

Have you ever implemented a performance strategy, and got great initial results, only to hit a wall and see performance gains come to a halt? This often happens when we measure the same things for an extended period of time, because what we‘re measuring may no longer support the direction the organization is trying to go. It’s important that executive management frequently (at least once a year) readdresses organizational goals and objectives. Remember, your goal as a performance manager is to make sure that your organization reaches its organizational goals. By constantly measuring what’s important to executives, you will no doubt become a key asset for executives.


About Victor Holman

Victor Holman is a performance management expert who provides fast, simple and inexpensive ways to transform organizational performance.

Check out his FREE performance management kit, which includes several templates, plans, and guides to help you get started with your next initiative.

Victor's Complete Lifecycle Performance Management Kit is a turnkey organizational performance management solution consisting of a web based organizational performance analysis, 7 guides, 39 templates, 600+ metrics, 35 best practices, 48 key processes, a performance roadmap and more.

Learn all about performance management at The Performance Portal

Aligning Performance To Organizational Goals and Objectives

Check out this Presentation which identifies 4 key areas for aligning performance to organizational goals and objectives.

Aligning Performance To Organizational Goals and Objectives

View more presentations from Victor Holman.

Ten Enterprise Performance Management Best Practices - Executing Phase

This article continues where we left off discussing the 11 performance management best practices in the planning phase of the Lifecycle Performance Management Model. The Lifecycle Performance Management Model is an enterprise framework that is centered on 35 best practices. These best practices span across the five phases of the performance life-cycle: defining, planning, executing, monitoring and reporting. This article is the third of a series of five discussing the performance management best practices within Lifecycle Performance Management, and will focus on the executing phase.

The executing phase best practices involve implementing the planned activities outlined in the defining and planning phases. This is where we develop metrics, align performance to organizational objectives, identify cross-functional processes, and integrate data. During the executing phase the performance management team must maintain a climate of open communication with business unit liaisons and executive management, as this is where executive goals are transformed into action.

1. Employee Performance Management

Employee Performance Management is the systematic process by which an organization involves its employees, as individuals and members of a group, in improving organizational effectiveness in the accomplishment of agency mission and goals. The Employee Performance Management process includes planning work and setting expectations, continually monitoring performance, developing the capacity to perform, periodically rating performance in a summary fashion, and rewarding good performance. Functions within employee performance management are recruit and hire management, compensation management, incentive management, goals management, learning management, competency management and performance measurement.

2. Information Services Performance Management

Information Services Performance Management is the practice of measuring and monitoring information systems and services and aligning them to organizational goals and objectives. Information Services Performance Management involves supporting employees and customers, aligning business unit objectives to system capabilities and performance, communicating IT planning and performance data in a way that is useful to business unit management, and adapting to growing complexities and constant change.

3. Process Management

Process Management is a series of actions taken to identify, analyze and improve existing processes within an organization to meet new goals and objectives. Process Management involves identifying key business processes and aligning the results of these processes with the strategic goals. Lifecycle Process Management consists of baselining the current environment, identifying critical success factors, redesigning inefficient or ineffective processes, automating processes, identifying process metrics, and training employees on cross functional process.

4. Data Integration Management

Data Integration Management is the practice of gaining business value from information assets through the effective use of data management technologies and best practices. Key components of Data Integration Management include data integration, data quality, database management systems, data warehousing and enterprise information management. Data Integration Management enables an organization to secure a single, accurate, corporate view of key information.

5. Performance Metrics Management

Performance Metrics Management is the process of identifying quantifiable, results-driven metrics that enable informed decision making and encourages improved service delivery. Performance Metrics Management involves understanding the business and complexities of the organization, focusing on the desired outcomes, involving all participants for consensus and buy-in, ensuring that formulas and logic are valid, and storing performance results in a centralized location for easy access.

6. Performance Alignment Management

Performance Alignment Management facilitates the translation of business and functional priorities into strategy. Performance alignment consists of aligning corporate strategy to four areas: division/departmental, workforce, financial and resources. Ultimately, Performance Alignment Management develops a performance strategy that feeds strategic alignment, reflects organizational priorities, and leads to successful execution of organizational goals and objectives.

7. Cross-functional Process Management

Cross-functional Process Management is the process of breaking down functional siloed thinking and building the organization around core processes rather than specific functional areas. Cross-functional Process Management focuses on those major processes which require support from multiple functional support groups. Ultimately, a well managed cross functional process enables performance tracking throughout each of the functional "hand offs" and weak points within a major process are identified and corrected.

8. Systems Management

Systems management is an automated event management system that proactively and reactively notifies system operators of failures, capacity issues, traffic issues, virus attacks and other transient events. The tools allow monitoring of system status, performance indicators, thresholds, notification of users, and dispatch of trouble tickets. Systems Management provides optimal system performance, quicker resolution of problems, and minimizes failures. Automated solutions are used in support of distributed computing operations processes and policies for performance and failure detection and correction, as well as optimization.

9. Change Management

Change management is the procedure, policies, and tools established to monitor organizational assets to assure that unauthorized changes are not being implemented. It also affirms that a database of changes is available so that changes can be easily recognized during troubleshooting activities

10. Procurement Management

Procurement Management is a set of policies and procedures to manage the procurement process. Procurement Management does not necessarily designate that all procurement personnel are centralized in a single location; rather it involves the development of a common set of procurement policies and operating procedures, pooling of information about requests, vendor contracts, asset data, industry information, and qualified procurement skills to ensure the pieces required to get a cost effective deal are properly considered. As well, centralized procurement assures that standardization rules are in compliance.

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About Victor Holman

Victor Holman is a performance management expert who provides fast, simple and inexpensive ways to transform organizational performance.

Check out his FREE performance management kit, which includes several templates, plans, and guides to help you get started with your next initiative.

Victor’s Complete Lifecycle Performance Management Kit is a turnkey organizational performance management solution consisting of a web based organizational performance analysis, 7 guides, 39 templates, 600+ metrics, 35 best practices, 48 key processes, a performance roadmap and more.

Learn all about performance management at The Performance Portal

11 Enterprise Performance Management Best Practices - Planning Phase

This article continues where we left off discussing the eight performance management best practices in the defining phase of the Lifecycle Performance Management Model. The Lifecycle Performance Management Model is an enterprise framework that is centered on 35 best practices. These best practices span across the five phases of the performance life-cycle: defining, planning, executing, monitoring and reporting. This article is the second of a series of five discussing the performance management best practices within Lifecycle Performance Management, and will focus on the planning phase.

The focus of the planning phase is to start the buzz and get your organization prepared for the cultural changes that will take place during your successful performance initiative. Best practices in the planning phase enable you to gain employee acceptance into the performance initiative and put employees into a high performance mindset. They also include base-lining current performance and setting future goals, breaking down functional barriers, identifying key processes that drive business success, and ensuring a successful performance management implementation through training.

1. Employee Acceptance Management

Employee Acceptance Management is the process of gaining employee buy-in by emphasizing performance expectations from the top level down. Employee Acceptance Management involves transforming employees into a high performance mindset, communicating employee expectations and enabling them to understand the impact that their specific role has on the success of the organization.

2. Performance Management Planning

Performance Management Planning is the practice of defining the performance strategy and
prioritizing activities according to that strategy-to ensure operational alignment with organizational goals. Performance Management Planning involves planning, budgeting, forecasting and allocating resources to support strategy and achieve optimal execution. The Performance Management Plan includes consolidating, monitoring, and reporting on performance outcomes for management, regulatory, and statutory purposes. The ultimate goal of Performance Management Planning is the ability to plan and budget in real-time with dynamic plans that provide real-time feedback to everyone who is part of the process.

3. Time Management (Planning versus Implementing)

Planning is an essential item on the critical path of every project. Our studies have shown that cutting corners on planning can triple the cost and time to implement enterprise level projects. Planning requires adequate information about the current and target states and accurate estimates of the time and financial investments required to perform all the steps necessary for change.

Planning also involves putting together a team of committed and motivated individuals with defined team roles, outlining all tasks, assigning responsibilities, and proactively managing and mitigating risks. The planning process should include the development of a vision/scope
document so that each team member understands the project vision, goals, objectives, schedule, and risks. The planning team should allow adequate time for team members to understand, investigate, document, and communicate prior to design and implementation.

4. Leadership Development

Leadership Development is the strategic investment in, and utilization of the human capital within the organization. The practice of Leadership Development focuses on the development of leadership as a process. With the rapid rate of change in our global economy, leadership has taken on the critical role of adaptation and innovation in the workplace. As companies restructure their business processes and employees, they need solid leadership training to communicate effectively, influence others, maximize creativity, and analyze your business. How leadership is demonstrated within an organization will determine how successful that organization will be and how successful those who follow will become.

5. Employee Training

Employee training is one of the most powerful cost reduction drivers. Our research shows that the under-trained employee consumes two to six times the amount of technical support (including peer support) than an adequately trained user. Employee training should be performed on systems and applications, being careful to match the training that is delivered in relation to the employee's job. Training should include a mix of instructor-led classroom training, computer-based training, and just-in-time training to help increase user productivity and reduce support costs.

6. Staff Motivation

A motivated staff is one that will operate as a team and will pitch in when needed to solve any problem or challenge at hand. They will often exceed expectations and provide critical back up for each other. A motivated staff works harder to meet the goals set by the organization.

7. Automated Asset Management

Electronically supported life-cycle driven asset process. Automated asset management consists of electronically supported procurement, automated inventory, and centralized data repository that are available to financial, administrative, technical planners, system administrators, and the service desk. Managed data within the asset management system consists of contract terms, hardware inventory, software inventory, accounting, maintenance records, change history, support history, and other technical and financial information.

8. Systems Scalability

Systems Scalability is a technology infrastructure that can logically and physically increase in performance and capacity with continuity to meet reasonable growth and change over time. A scalable architecture contains a strategic migration plan for continuous growth and progress. Commitment to scalable architectures enables the roll-out of homogeneous hardware and application platforms across users and departments with different processing requirements, while providing technical staff with a common platform to support.

9. Capacity Planning

Capacity planning is a process by which the capacity of the network and assets is measured, compared against requirements, and adjusted as appropriate. The process of capacity planning involves mapping new initiatives to existing infrastructure, understanding the cost
dynamics of network bandwidth and storage, memory, and other system resources.

10. Enterprise Policy Management

Enterprise policy management is a managed user environment in which a network or desktop administrator can control, with rules-based logic, which applications, settings, network resources, databases, and other IT assets a user can use. This environment is defined by user ID and is not necessarily machine specific. It is typically implemented by user profiles maintained at the server and synchronized with the client device that a user is logged onto.

Enterprise policy management precludes the user from making changes to the system; such as introducing unauthorized software or changing settings that may cause conflict with other system resources. As well, a managed environment controls the ease of use of the desktop, providing a common set of applications and access for groups of users or individuals. In this manner, the user is presented only with the tools they have been trained on and need for the job, and assures that changes are managed. This process, integrated with a system management and change management policy, can reduce service desk calls and unplanned
downtime, as well as create a more predictable platform for system upgrades.

11. IS Training

IS professional training is critical in preparing the IS staff that are delivering support and service to users to confidently plan and implement initiatives and solutions, and resolve user issues quickly and effectively. IS professional training should be obtained for all staff members on the systems, tools, and applications that are utilized in their daily jobs. Training should include instructor-led training classes,certification courses, seminars, and computer-based training.

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About Victor Holman

Victor Holman is a performance management expert who provides fast, simple and inexpensive ways to transform organizational performance.

Check out his FREE performance management kit, which includes several templates, plans, and guides to help you get started with your next initiative.

Victor’s Complete Lifecycle Performance Management Kit is a turnkey organizational performance management solution consisting of a web based organizational performance analysis, 7 guides, 39 templates, 600+ metrics, 35 best practices, 48 key processes, a performance roadmap and more.

Learn all about performance management at The Performance Portal

Eight Enterprise Performance Management Best Practices - Defining Phase

Have you ever tried looking up performance management best practices? If so, then you probably discovered the same things I did, that there is very little documentation or standard best practices dealing with performance management. You may find human resources best practices or IT best practices, and even best practices dealing with various departments within an organization. But chances are you will have little luck finding a comprehensive set of enterprise performance management best practices. The truth is, performance management is a complex process that affects every aspect of your organization. Even with a detailed plan on how to reach your organizational goals this can be an overwhelming task and take years to fully understand. I've put together a set of enterprise performance management best practices that drive organizational success and help you avoid the obstacles that can bring a performance initiative to a halt.

The Lifecycle Performance Management Model is an enterprise framework that is centered on 35 best practices. These best practices span across the five phases of the performance life-cycle: defining, planning, executing, monitoring and reporting. This article is the first of a series of five discussing the performance management best practices within Lifecycle Performance Management, and will focus on the defining phase.

The defining phase is where preliminary management processes are performed. These preliminary processes are those outside of traditional performance management, but which are critical to the success of your performance management initiative. Defining phase best practices are the executive processes that don't necessarily include participation from all levels within the organization.

1. Organizational Mission and Goals Management

Mission and Goals Management is the practice of ensuring that organizational mission and goals are well documented and communicated throughout the organization. Identified by executives and executed by management and staff, Organizational Mission and Goals Management is a process that includes participation at all levels and requires continuous validation throughout the maturation and growth of the organization. Organizational Mission and Goals Management includes identifying objectives throughout all business units, personnel, processes and systems and monitoring the progress of meeting those objectives. The objective is
to control costs by having people, processes and systems within the organization working toward supporting the mission and goals of the organization.

2. Performance Scope Management

The practice of defining the outcomes, documenting assumptions, and defining the scope of your performance initiative. Performance Scope Management can be approached in several ways such as defining deliverables, functionality and data, technical structure, and enterprise/organizational structure. Performance Scope Management involves setting the high level processes for which the performance management team will approach divisions, support teams and individuals in order to align performance to business objectives. Performance Scope Management ensures that expectations are met by clarifying roles, processes and expectations.

3. Performance Team Development

Performance Team Development is a critical process in Lifecycle Performance Management. It involves ensuring that the performance team is well aware of the issues facing the organization from the customer, employee, senior management and key stakeholders perspectives. Performance Team Development includes ensuring that there is support and commitment from the CEO, a direct reporting line to executive management, access to systems, data, organizational charts and processes, and liaisons form each of the business units to bridge the gap in communication and operational knowledge.

4. Vendor Performance Management

A low risk vendor conforms to the Gartner Group vendor suitability models. The vendor/service provider model assesses the viability of vendors against a set of characteristics that have been proven a low risk, high quality purchase. An organization that utilizes low risk, as well as high quality vendors and providers, will be less likely to encounter quality, reliability, or supply issues. This practice compares vendors and service providers on their financial viability, organizational stability, quality control, stringent testing for compatibility, independent market support for technology differentiation, and responsiveness to field service issues. We believe that vendors that have best in class capabilities will reduce the risk and associated costs compared to vendors that may offer lower priced products without sound testing, field support, or management practices.

5. Vendor Standardization

Vendor standardization limits the number of vendors that an organization purchases from. For given assets, an
organization selects a limited set of vendors from which products or services can be purchased. Vendor Standardization usually consists of a primary and secondary vendor. By standardizing on fewer vendors, an
organization can gain purchasing leverage and reduce incompatibility issues, support issues, vendor liaison requirements, testing of new technology, and administrative costs of vendor management. While it may limit the available selection of technology and features somewhat, it enables larger discounts with volume purchasing. Vendor standardization is part of a comprehensive asset management process that includes establishment of procurement procedures and policies, and compliance monitoring and management.

6. Organizational Stability

Stability of an organization is critical to keeping the staff members and teams consistent and focused. It enables the maturation of processes, procedures, and talent. Constant reorganization, management changes, and political infighting take a toll on moral, turnover, costs, risk and progress.

7. IT Cost Management

IT Cost Management is the financial management of your network that measures the total cost of IT services on a regular basis, compares the costs to industry benchmarks, and makes decisions on changes that include financial, not just technical, objectives. The process, policies, and tools are continuously and regularly applied to track progress and optimize spending. With IT Cost Management frameworks, such as TCO Lifecycle Management, proper technology refresh cycles can be established and investments can be verified as having positive financial impact and returns prior to implementation.

8. Performance-Based Budgeting

A results focused planning and budgeting framework which focuses on three elements: the strategy (how to achieve outcome), outputs (activities to achieve final outcome), and the result (final outcome). Performance-based budgets use missions, goals and objectives to justify funding. Through the allocation of resources, performance-based budging achieves specific objectives based on program goals and measured results. As a result, it is possible to understand which activities are cost-effective in terms of achieving the desired result.

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About Victor Holman

Victor Holman is a performance management expert who provides fast, simple and inexpensive ways to transform organizational performance.

Check out his FREE performance management kit, which includes several templates, plans, and guides to help you get started with your next initiative.

Victor’s Complete Lifecycle Performance Management Kit is a turnkey organizational performance management solution consisting of a web based organizational performance analysis, 7 guides, 39 templates, 600+ metrics, 35 best practices, 48 key processes, a performance roadmap and more.

Learn all about performance management at The Performance Portal

Twelve Basic Predictive Analytics Techniques

Predictive analytics is a solution used by many businesses today to gain more value out of large amounts of raw data by applying techniques that are used to predict future behaviors within an organization, it's customer base, it's products and services. Predictive analytics encompasses a variety of techniques from data mining, stastics and game theory that analyze current and historical facts to make predictions about future events.

Predictive models examine patterns found in historical and transactional data to identify opportunities and risks. Predictive models capture relationships among many factors to allow assessment of risk or potential associated with a particular set of conditions, guiding decision making for candidate transactions.

There are some basic and more complex predictive analytics techniques. Three basic techniques include:

Data Profiling and Transformations
Sequential Pattern Analysis
Time Series Tracking.

Data profiling and transformations are functions that analyze row and column attributes and dependencies, change data formats, merge fields, aggregate records, and join rows and columns.

Sequential pattern analysis discovers relationships between rows of data. Sequential pattern analysis is used to identify frequently observed sequential occurrence of items across ordered transactions over time. Such a frequently observed sequential occurrence of items (called a sequential pattern) must satisfy a user-specified minimum support. Understanding long-term customer purchase behavior is an example of the sequential pattern analysis. Other examples include customer shopping sequences, click-stream sessions, and telephone calling patterns.

Time series tracking tracks metrics that represent key behaviors or business strategies. It is an ordered sequence of values of a variable at equally spaced time intervals. Time series analysis accounts for the fact that data points taken over time may have an internal structure (such as autocorrelation, trend or seasonal variation) that should be accounted for. Examples include patterning customer sales that indicate product satisfaction and buying habits, budgetary analysis, stock market analysis, census analysis, and workforce projections.

More advanced predictive analytics techniques include:

Time Series Forecasting
Data Profiling and Transformations
Bayesian Analytics
Regression
Classification
Dependency or Association Analysis
Simulation
Optimization

Time series forecasting predicts the future value of a measure based on past values. Time series forecasting uses a model to forecast future events based on known past events. Examples include stock prices and sales revenue.

Data profiling and transformation uses functions that analyze row and column attributes and dependencies, change data formats, merge fields, aggregate records, and join rows and columns.

Bayesian analytics capture the concepts used in probability forecasting. It is a statistical procedure which estimate parameters of an underlying distribution based on the observed distribution. An example is used in a court setting by an individual juror to coherently accumulate the evidence for and against the guilt of the defendant, and to see whether, in totality, it meets their threshold for 'beyond a reasonable doubt'.

Regression analysis is a statistical tool for the investigation of relationships between variables. Usually, the investigator seeks to ascertain the causal effect of one variable upon another-the effect of a price increase upon demand, for example, or the effect of changes in the money supply upon the inflation rate.

Classification used attributes in data to assign an object to a predefined class or predict the value of a numeric variable of interest. Examples include credit risk analysis, likelihood to purchase. Examples include acquisition, cross-sell, attrition, credit scoring and collections.

Clustering or segmentation separates data into homogeneous subgroups based on attributes. Clustering assigns a set of observations into subsets (clusters) so that observations in the same cluster are similar. An example is customer demographic segmentation.

Dependency or association analysis describes significant associations between data items. An example is market basket analysis. Market basket analysis is a modeling technique based upon the theory that if you buy a certain group of items, you are more (or less) likely to buy another group of items.

Simulation models a system structure to estimate the impact of management decisions or changes. Simulation model behavior will change in each simulation according to the set of initial parameters assumed for the environment. Examples include inventory reorder policies, currency hedging, military training.

Optimization models a system structure in terms of constraints to find the best possible solution. Optimization models form part of a larger system which people use to help them make decisions. The user is able to influence the solutions which the model produces and reviews them before making a final decision as to what to do. Examples include scheduling of shift workers, routing of train cargo, and pricing airline seats.

--------------------------------------------

About Victor Holman

Victor Holman is a performance management expert who provides fast, simple and inexpensive ways to transform organizational performance.

Check out his FREE performance management kit, which includes several templates, plans, and guides to help you get started with your next initiative.

Victor’s Complete Lifecycle Performance Management Kit is a turnkey organizational performance management solution consisting of a web based organizational performance analysis, 7 guides, 39 templates, 600+ metrics, 35 best practices, 48 key processes, a performance roadmap and more.

Learn all about performance management at The Performance Portal

Three Basic Predictive Analysis Models

It used to be that basic data was enough to make successful decisions within an organization. A CEO could look at common key performance indicators such as net profit margin, debt to income ratio, and return on investment and be able to make the best decisions available at the time.

For the past several decades, companies have collected large amounts of data in order to evaluate why they performed the way they did and to understand their customer's needs and preferences. They built data warehouses and advance reports to improve accuracy to improve key processes, and optimize performance.

As time went on, companies learned that they could use historical data and trends to predict future behavior, and to make decisions. This was seen in examples as when a call center manager uses call volume by hour statistics to staff a call center for peak and non peak times.

Then organizations moved beyond reporting capabilities and began gathering even larger amounts of data to apply statistical analysis to further predict future trends and behavioral patterns. This was seen in examples like the banking industry using credit history, residential information, job information, debts, etc to calculate a credit score to determine if a person is likely to pay off a loan. This is an example of predictive analytics, and organizations in all genres are learning to apply it to their reporting capabilities. Predictive analytics applies large volumes of data to capture relationships between explanatory variables (variables used in a relationship to explain or predict changes in the values of another variable) and predicted variables from past data, and applying it to predict future outcomes.

Predictive modeling is the process by which data is modeled and diagnosed to try to best predict the probability of an outcome. In many cases the model is chosen on the basis of detection theory to try to guess the probability of a signal given a set amount of input data. Models can use one or more classifiers in trying to determine the probability of a set of data belonging to another set.

There are three main types of models associated with predictive analytics: predictive models, descriptive models, and decision models.

Predictive models predict future behavior and anticipate the consequences of change. Predictive models are comprised of a number of predictors (factors likely to affect future behavior or results). For example, in marketing a customer's age, sex and income can be used to predict the likelihood of buying.

Predictive analytics' central building block is the predictor, a single value measured for each customer. For example, 'most recent', which is based on the number of weeks since the customer's last purchase, has higher values for more recent customers. This predictor is usually a reliable campaign response predictor: you will receive more responses from those customers more highly ranked by 'most recent'. That means that if you contact your customers in order of 'most recent' - first, call the most-recent customer; next, call the next-most-recent customer; and so on - you will improve your response rate. For each prediction goal, there are an abundance of predictors that will help rank your customer database. For example, consider a customer's online behavior: Customers who spend less time logged on may be less likely to renew their annual subscription. In this case, retention campaigns can be cost-effectively targeted to customers with a low monthly usage predictor value.

Descriptive models quantify the relationships between data in order to classify customers into groups. While predictive models focus on predicting one customer's behavior, descriptive models identify relationships between several customers or products. Descriptive models do not predict a target value, but focus more on the intrinsic structure, relations, interconnectedness, etc. Descriptive models are used in our earlier example of the financial industry and credit scores.

Cluster analysis is a descriptive modeling technique that identifies clusters embedded in the data. A cluster is a collection of data objects that are similar in some sense to one another.

Another descriptive modeling technique is the k-means algorithm. K-means algorithm is a distance-based clustering algorithm that partitions the data into a predetermined number of clusters (provided there are enough distinct cases). The k-means algorithm works only with numerical attributes. Distance-based algorithms rely on a distance metric (function) to measure the similarity between data points.

Decision models describe the relationship between all decision elements and predict the results of decisions, allowing you to try different scenarios, and optimize results. Clinical Decision Support Systems use predictive analysis in the health care industry to determine at risk patients and sometimes to determine which course of action would be best given a multiple array of variables.

Rational decision models are based around a cognitive judgment of the pros and cons of various options. It is organized around selecting the most logical and sensible alternative that will have the desired effect. The decisions are normally organized through a detailed analysis of alternatives and a comparative assessment of the advantages of each. Weighted criteria scoring is an example of rational decision models.

Hopefully this has given you a better understanding of the basic predictive analysis models that drive predictive analytics. Check out my article on predictive modeling techniques to learn about 12 common techniques used to predict future behavior.

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About Victor Holman

Victor Holman is a performance management expert who provides fast, simple and inexpensive ways to transform organizational performance.

Check out his FREE performance management kit, which includes several templates, plans, and guides to help you get started with your next initiative.

Victor’s Complete Lifecycle Performance Management Kit is a turnkey organizational performance management solution consisting of a web based organizational performance analysis, 7 guides, 39 templates, 600+ metrics, 35 best practices, 48 key processes, a performance roadmap and more.

Learn all about performance management at The Performance Portal

The Challenges of Introducing Predictive Analytics to Your Organization

Predictive analytics is a solution used by many businesses today to gain more value out of the large amounts of raw data by applying techniques that are used to predict future behaviors within an organization, it's customer base, it's products and services. Predictive analytics encompasses a variety of techniques from data mining, stastics and game theory that analyze current and historical facts to make predictions about future events.

The benefits of implementing predictive analytics is undeniable. There are countless documented case studies and success stories where predictive analysis yielded a substantial return on investment, helped companies optimize existing processes, provided a better understanding of customer behavior, identified unexpected opportunities, and anticipated problems before they occurred. But with all of the benefits associated with predictive analytics, there are many challenges that accompany becoming an analytics-driven organization.

The perceived complexity is the largest challenge facing executives today. The cost of implementation is a close second. While these are legitimate fears, many tools are being developed to simplify the process and establish transparency from the complex formulas and statical modeling. It is, however, up to organizations to educate themselves on the basics and concepts of predictive analysis in order to fully utilize these tools.

Another challenge, which is more technical, is the traditional approach of having analyst explore data sets by saving data and manually applying relationships in order to make predictive assumptions. While this can work at a basic level of predictive analytics, predictive analytics at it's most effective application requires extremely large amounts of data and thus is best suited for analytics platforms wih parallel processing, which support custom analytical applications that query data using SQL.

This brings us to another challenge with implementing predictive analytics in your organization, and that is managing the enormous data volumes associated with it. Some organizations known to apply leading edge analytical techniques, are gathering perabytes (that's approximately 1000 terabytes, or 1 million gigabytes) of data. While these amounts of data require costly data warehouse upgrades, it enables organizations to form very comprehensive analytics and it enhances visitor/customer experience by providing targeted, customized marketing and services.

But with these large amounts of data and data storage comes the challenges of producing the platform for processing this data with complex formulas at fast rates. Because of this, analytic platforms often run off massively parallel processing (MPP) databases. MPP databases coordinate processing of a single program by more than one processor by dividing up parts of a program into several processors with their separate memory and operating systems. But many organizations that cannot afford MPP databases, instead implement analytical platforms as data marts to off-load complex processing.

While these challenges to indeed appear to be complex, the important thing to know is that if you have the architecture to support it, there are several tools out there that take out the complexities and applying predictive modeling.

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About Victor Holman

Victor Holman is a performance management expert who provides fast, simple and inexpensive ways to transform organizational performance.

Check out his FREE performance management kit, which includes several templates, plans, and guides to help you get started with your next initiative.

Victor’s Complete Lifecycle Performance Management Kit is a turnkey organizational performance management solution consisting of a web based organizational performance analysis, 7 guides, 39 templates, 600+ metrics, 35 best practices, 48 key processes, a performance roadmap and more.

Learn all about performance management at The Performance Portal

What is Predictive Analytics and Why Are We So Afraid of It?

The other day I got into a discussion with a panel of executives and the topic of predictive analytics became a main area of discussion. Most of the executives were aware of predictive analytics, and many of them had implemented predictive analytics in some form or another, whether it be through CRM, decision support systems, marketing, etc. One thing they all had in common was they all were interested in increasing the value of their data investment. But the feeling that permeated from the group most was intimidation.

Most executives, while extremely interested in implementing predictive analysis techniques and strategies, felt overwhelmed about the perceived technical nuances that accompany them. So why are we so afraid of entering the informative world of predictive analytics? The truth is, predictive analytics can be very complex, combining advanced data mining and data warehouse solutions to transform large data volumes into meaningful decision making information. This article will address some of the predictive analytics fears facing executives today, and hopefully will ease some of those fears you may have about implementing an predictive analysis solution.

The main reason most execs fear predictive analytics is because it is driven mainly by statistical analysis. Predictive analytics applies statistics, advanced mathematics, artificial intelligence and data management that many business and IT professionals view as extremely complex. What they probably don't realize is that there are several tools that are out today that are dedicated to taking out the complexities that drive people away from predictive analysis. It used to be that you had to hold a PhD in statistics to create and run analytical computations, which was extremely costly to retain. When combined with the costs of specialized analysis programs and hardware, it was very difficult to justify costs. Today however, with a strong understanding of the business processes and the data your business generates, combined with some SQL skills, anybody can perform sophisticated analysis.

Another fear businesses have when it comes to implementing a predictive analysis solution is the high costs that are associated with it. They are skeptical about the numerous case studies and success stories where predictive analysis yielded a substantial return on investment, helped companies optimize existing processes, provided a better understanding of customer behavior, identified unexpected opportunities, and anticipated problems before they occurred.

Some of the fears executives have when it comes to implementing a predictive analysis solution simply come from the fact that most only have a vague concept of the many areas that predictions can be applied to deliver additional value throughout the entire organization.

Lastly, most people fear stepping into the world of predictive analytics because it requires a lot of skill and creativity. When utilizing a platform that can manipulate such vast amounts of data, the sky is the limit as to what kinds of insights your company can gain when combined with creative professionals that truly understand the data, the business, and the organizational goals. But until a framework is created that walks these businesses through the stages of planning, manipulating and evaluating data in order to make predictions and drive decision making, there will be a large number of executives that remain reluctant to enter predictive analytics.

The other day I got into a discussion with a panel of executives and the topic of predictive analytics became a main area of discussion. Most of the executives were aware of predictive analytics, and many of them had implemented predictive analytics in some form or another, whether it be through CRM, decision support systems, marketing, etc. One thing they all had in common was they all were interested in increasing the value of their data investment. But the feeling that permeated from the group most was intimidation.

Most executives, while extremely interested in implementing predictive analysis techniques and strategies, felt overwhelmed about the perceived technical nuances that accompany them. So why are we so afraid of entering the informative world of predictive analytics? The truth is, predictive analytics can be very complex, combining advanced data mining and data warehouse solutions to transform large data volumes into meaningful decision making information. This article will address some of the predictive analytics fears facing executives today, and hopefully will ease some of those fears you may have about implementing an predictive analysis solution.

The main reason most execs fear predictive analytics is because it is driven mainly by statistical analysis. Predictive analytics applies statistics, advanced mathematics, artificial intelligence and data management that many business and IT professionals view as extremely complex. What they probably don't realize is that there are several tools that are out today that are dedicated to taking out the complexities that drive people away from predictive analysis. It used to be that you had to hold a PhD in statistics to create and run analytical computations, which was extremely costly to retain. When combined with the costs of specialized analysis programs and hardware, it was very difficult to justify costs. Today however, with a strong understanding of the business processes and the data your business generates, combined with some SQL skills, anybody can perform sophisticated analysis.

Another fear businesses have when it comes to implementing a predictive analysis solution is the high costs that are associated with it. They are skeptical about the numerous case studies and success stories where predictive analysis yielded a substantial return on investment, helped companies optimize existing processes, provided a better understanding of customer behavior, identified unexpected opportunities, and anticipated problems before they occurred.

Some of the fears executives have when it comes to implementing a predictive analysis solution simply come from the fact that most only have a vague concept of the many areas that predictions can be applied to deliver additional value throughout the entire organization.

Lastly, most people fear stepping into the world of predictive analytics because it requires a lot of skill and creativity. When utilizing a platform that can manipulate such vast amounts of data, the sky is the limit as to what kinds of insights your company can gain when combined with creative professionals that truly understand the data, the business, and the organizational goals. But until a framework is created that walks these businesses through the stages of planning, manipulating and evaluating data in order to make predictions and drive decision making, there will be a large number of executives that remain reluctant to enter predictive analytics.

---------------------------------------------

About Victor Holman

Victor Holman is a performance management expert who provides fast, simple and inexpensive ways to transform organizational performance.

Check out his FREE performance management kit, which includes several templates, plans, and guides to help you get started with your next initiative.

Victor’s Complete Lifecycle Performance Management Kit is a turnkey organizational performance management solution consisting of a web based organizational performance analysis, 7 guides, 39 templates, 600+ metrics, 35 best practices, 48 key processes, a performance roadmap and more.

Learn all about performance management at The Performance Portal

Why Your Organization Needs a Performance Improvement Strategy...

It is believed that having the right metrics can only get you 80% of the way to an effective performance metrics program. The last 20% comes from deploying the metrics, seeing how they affect performance, and then adjusting them accordingly. The same can be said about the areas which these metrics guide. One of the main reasons we measure performance is so that we can identify weaknesses and areas of improvements. What we do once we identify these weaknesses and areas of improvement is what determines how effective our performance initiative, and in turn, organization will be.

Learn How to Identify Your Areas of Improvement

The purpose of performance improvement is not to point fingers and place blame on a group or individuals that are not performing well, nor is it intended to solve problems. Performance improvement is simply a way of looking at how an organization can perform better. The difficulty with performance improvement, especially in an enterprise organization, is understanding which processes are working well and which aren’t and knowing what to tackle first when key processes are interconnected.

Learn How to Approach Performance and Leverage Your Organizational Strengths

Other challenges of implementing a performance improvement plan enterprise-wide occur when performance management teams try to implement change on a large scale. Performance improvement is best accomplished by implementing small changes, mastering a particular process to achieve those changes and identifying the next change that will lead to further performance improvements.

Learn How to Apply a Custom Performance Roadmap to Transform Organizational Performance

The best way to ensure that your organization is constantly improving and identifying relevant areas for improvement is by involving all employees, from top management down. Most often, negative performance is a result of one or more of the following factors, and is best resolved when all levels of the organization participates:

· Unclear team/job responsibilities

· Unclear or lack of performance feedback

· Inadequate physical environment, including improper tools, supplies, or workspace

· Lack of motivation and incentives to perform as expected

· Skills and knowledge required for the job

· Ineffective processes

Take control of your organization’s performance and join the elite group of high performing organizations.

About Victor Holman

Victor Holman is a performance management expert who provides fast, simple and inexpensive ways to transform organizational performance.

Check out his FREE performance management kit, which includes several templates, plans, and guides to help you get started with your next initiative.

Victor’s Complete Lifecycle Performance Management Kit is a turnkey organizational performance management solution consisting of a web based organizational performance analysis, 7 guides, 39 templates, 600+ metrics, 35 best practices, 48 key processes, a performance roadmap and more.

Learn all about performance management at The Performance Portal

How to Break Down Functional Thinking Within Your Organization

We've all been in situations where a division or functional group within an organization points fingers at other divisions when a process failure occurs. Or part of a team that had little idea of how their function fits into other functions within the organization. This article discusses an issue that affects almost every organization, and that's breaking down functional or departmentalized thinking and creating streams of information that flow across multiple functional or departmental boundaries.

Most organizations use departments and business units in order to differentiate the various functions and services which drive their business. For example, personnel related matters are managed in HR departments, payroll is handled in accounting departments and computer and systems related incidents are resolved in IT departments, and so on. In addition most business intelligence systems are built to support decision making in those specific functional areas rather than being built around core processes that span the enterprise and govern how a business operates. For instance, marketing collects only the information it needs to put products and services before the public eye. Sales departments pay attention to leads, and conversions, and customer buying patterns. And customer service tracks only those customers who call in with questions and complaints, and how the issue was resolved.

In reality, business processes are streams of activity that flow across functional boundaries, and not contained within a single department. As a result business processes are often fragmented across "functional silos". A silo in this case is a division or management system that is not integrated with the operations of other, related divisions or management systems.

The problem with organizations that are trapped in this siloed mentality is employees rarely study how their function contributes to the larger business process in which their function supports. As a result, these organizations have limited knowledge on their processes and often do not properly identify their core processes. This is a major pain point in many performance management initiatives, because most major processes require support from multiple functional support groups. In order to break down these silos, each functional group and individual must understand how their primary process fits into the core function of their business.

In order to successfully measure the performance and efficiency of these major processes, we must first understand which groups are responsible for handling these processes and what their responsibilities are. Second, we must understand the handoffs of responsibility, that is, when and how the process gets transferred from one group to the next. Thirdly, we must develop requirements for each responsibility within the process. And if we're really serious about eliminating functional thinking within our organizations, we must cross-train employees so that they fully understand the entire processes, which they support.

For example, when a purchase request comes in, an approval committee or governance team must approve or reject that request within 24 hours. Then the purchasing department must place the order within 24 hours. Then, the warehouse must send the order within 24 hours. Once we understand this, we can say that the purchasing order process, if approved, will be completed within 72 hours. If the purchase is not sent within 72 hours, we now understand where the bottleneck occurred. Ultimately, if this happens on multiple occasions, the responsible group will have to revisit their sub-processes.

Success breaking down functional thinking depends largely on how well the performance management team involves functional support group management and key team members, and how well these sub-processes are identified. Breaking down functional thinking is critical for organizational growth. The important aspect is developing the proper communication channels throughout the entire organization so that when dependencies and cross functional processes are identified, points of contacts will be established and each group will be responsible for ensuring that their staff understand their contribution to larger, multi-functional processes and organization goals.

If you are looking for a performance management solution that focuses on applying the best practices and key processes that drive organizational success, check out my Free Performance Management Kit.

To learn about the 35 performance management best practices, the 48 key processes, 82 decision support techniques and more, go to The Peformance Portal.

How to Turbo Charge Organizational Success by Implementing Performance Management Best Practices

In this global fiscal crisis, many business owners and executives are looking for ways to maximize organizational performance and cut costs at the same time. While this is a very difficult task for most CEOs, the truth is these goals can be accomplished with relative ease once we stop relying on technology and start focusing on our internal processes and leveraging existing assets. According to business intelligence software vendor SAS, the number two reason why performance programs fail is failure to adopt best practices. But what are performance management best practices and why are they so valuable? By definition, they are techniques or methodologies that, through experience and research, have been proven to reliably lead to desired performance results. This article discusses the value of applying performance management best practices and leveraging your existing assets for maximum performance.
Most companies have some form of performance management processes in place. It's common to baseline performance, apply a set of performance metrics, identify goals and create a plan to reach them. But where most companies fail are in the intangible processes, such as gaining employee acceptance and buy-in, aligning performance to organizational objectives, choosing the right business intelligence tools, and so forth. It's these intangibles that can bring performance initiatives to a halt. If you simply address these intangible processes while implementing your existing performance initiatives, you can significantly increase your performance success through these tough financial times.

It has become our business culture to invest large sums of money on business intelligence tools and high priced consulting for managing data and key processes that drive organizational success. We have become so reliant on these products and services as solutions that we have failed to understand the true cause of organizational breakdown, and that is our internal processes, most specifically, how we approach managing performance within our organization.

You've probably heard the saying 'what gets measured, gets done'. Well, that's true. But equally true is HOW it's measured determines HOW WELL it gets done. You can use all the industry standard metrics you can find, but if internal processes aren't in place to educate and motivate those being measured, or if different departments are executing the same functions differently, the systems you have in place will not drive peak performance. Metrics quantify high performance, but it's the best practices and processes that get you to that level.

So how are organizations supposed to adopt performance management best practices when there is not a comprehensive set documented and integrated into a logical, effective framework? I've identified 35 best practices that greatly impact the success of any performance initiative, and has an excellent, low cost tool that evaluates an organization's approach to performance management and measures how well they utilize performance management best practices throughout the entire organization. It is called the Organizational Performance and Best Practices Analysis and it maps these best practices to people, processes and systems and provides a custom step-by-step roadmap detailing your critical path to success. By fully understanding where your organization utilizes best practice processes well, you can leverage those strengths and resources to departments that need them the most.

If you are looking for a performance management solution that focuses on applying the best practices and key processes that drive organizational success, check out my Free Performance Management Kit.

To learn about the 35 performance management best practices, the 48 key processes, 82 decision support techniques and more, go to The Peformance Portal.

How to Evaluate Organizational Performance in Economic Hard Times

We've all made the decision to improve our appearance at some point in our lives. Maybe we've decided we were going to lose weight by dieting and exercise. Or maybe we've decided to gain strength by lifting weights. The first thing we did was stepped on that scale and said "Wow, I need to lose a few pounds". Or we ran to the gym and measured our strength and endurance at various exercises.

What we were actually doing was creating a baseline. We were creating a snapshot of our current selves. Let's just pretend that we didn't baseline our current self, we didn't have our measurements, and based personal goals based on Miss America, or Mr. Universe's appearance. We wouldn't capitalize on the available data (our current selves) and set realistic goals. Shortly, we'd become frustrated, lose motivation, and eventually fail.

Likewise, businesses often don't capitalize on available data to get them through difficult times. With a new year beginning and growing concerns of our economic future, now is a good time to evaluate our current environments and identify our organizational strengths, weaknesses and areas for improvements and cost savings. This article discusses the value of baselining organizational performance, different baselining approaches your organization can, and overcoming variables that add complexity to your performance baselines.

Baselining involves using historical performance data to calculate averages and standard deviations. The average establishes the baseline and the standard deviation is a percentage change in the baseline deemed acceptable. When performance exceeds the standard deviation, some specified action is usually required.

If your organization has clear, specific goals and objectives, the data to be used in the baseline is easier to determine. And of course, if goals and objectives are vague or unclear, it can be difficult to identify important baseline data. But given these tough financial times, it is probably most beneficial to focus on financial performance and key processes.

A performance baseline is performance information gathered to evaluate your current state and measure variations to gauge successes and failures within the organization. Baselines may also be used to establish goals and standards, to set SLA metrics and performance thresholds, and to make important decisions. But perhaps the most important, but overlooked reason we do performance baselines is to refocus our organizations on what's important. You may have done a baseline a couple of years ago, but chances are you are still measuring the same things you measured back then. Performance a new baseline forces us to re-evaluate what's important to organization as it endures the constant changes brought on by this dynamic economy.

Types of Performance Baselines

There are three types of baselines:

• rolling baselines
• recurring time-based baselines
• and specific date baselines.

Rolling baselines compare current performance metrics with a period of time preceeding the current period. An example would be comparing last month's performance to the average performance of the previous 12 months.

Recurring time-based baselines compare current performance metrics with performance baselines calculated for the same length of periods. Daily or weekly baselines are good examples of recurring time-based baselines.

Specific date baselines compare current performance metrics with the metrics from a specific date. For example, gathering baseline sales metrics for the day after Christmas.

Complexitites of Baselining Performance

Historical baselines often answer the question "how many?" such as "how many tickets were created over a given period of time?" The historical baseline data are the averages of such counts over that specified period. Baselines can be relative to any arbitrary point in time.

While this seems simple, it gets more complex when you take into effect some of the following variables: processes that take several days to complete, business hours calculations (e.g. M-F, 9-5, excluding holidays or specific dates), calculations involving multiple time zones, and calculation involving phased implementations.

When processes extend for multiple days, counting and time calculations become considerably more difficult, especially when a reporting tool is not utilized. Processes executed on business days and during business hours are also more difficult. In this case the proper divisor at the Day level is the number of business days in the last 365 calendar days, taking into account weekends and holidays. The divisor at the Hours level is the number of business hours in the last 24 hour period. Calculations with Multiple Time Zones can span across multiple cities around the world, reflecting different holidays and work norms. The baseline divisor thus becomes a function not only of Time but also of Location, thus further complicating the process. Projects utilizing phased implementations where new locations or divisions go "live" as the enterprise expands (such as in a phased Enterprise Resource Planning implementation). In this case, the baseline calculation must take into account how long a particular location has been live in order to obtain an accurate baseline.

Understanding Variables and Standard Deviations

Variance and Standard Deviation are measures of how spread out a distribution is. In other words, they are measures of variability. The spread is the degree to which scores on the variable differ from each other. If every score on the variable were about equal, the variable would have very little spread. Standard Deviation is the square root of the variance. It is the most commonly used measure of spread. An important attribute of the standard deviation as a measure of spread is that if the mean and standard deviation of a normal distribution are known, it is possible to compute the percentile rank associated with any given score. In a normal distribution, about 68% of the scores are within one standard deviation of the mean and about 95% of the scores are within two standard deviations of the mean.

Identifying the Right Data to Baseline

There's a basic rule to identifying the right data to baseline:

1) measure what your customers say is important,
2) measure areas where there are problems you'd like to solve, and
3) measure the business objectives you are aiming to achieve.

If your organization has clear, specific goals and objectives, the data to be used in the baseline is easier to determine. However, if goals and objectives are vague or unclear, it is difficult to identify important baseline data. Measurements should be aligned to your organization's objectives and should be SMART (Specific, Measurable, Actionable, Relevant, and Timely).

If you are looking for a performance management solution that focuses on applying the best practices and key processes that drive organizational success, check out my Free Performance Management Kit.

To learn about the 35 performance management best practices, the 48 key processes, 82 decision support techniques and more, go to The Peformance Portal.

How to Develop a Performance Metrics Repository That Drives Organizational Success

So, you've documented your organizational objectives and you've identified performance metrics. Now, where do you store these metrics? You store them in a performance metrics repository. A performance metrics repository is more than a list of metrics, it is a documented resource that explains to stakeholders everything they need to know about the metrics, such as what they are, how they support organizational objectives, how data is collected, who collects it, and so forth.

In small organizations there are normally fewer metrics, and they tend to be maintained centrally. In larger organizations with multiple business units, metrics are often maintained at the business unit level. Business units may have a number of metrics that they monitor, from systems performance to processes to employee performance. The key purpose of the performance metrics repository is to serve as the central point for viewing key performance measures across the organization. The magic word is key performance measures. While an organization may monitor hundreds of metrics enterprise-wide, the goal of the performance management team is to capture, collect and analyze the key measures that drive business and align to organizational objectives.

In your performance metrics repository, it is probably best that you include the following fields:

• The business unit performing the service
• The name of the performance measurement
• Description of the measurement
• Explanation of measurement formula
• Resource and location of the data
• Organization Objectives which the metric supports
• Type of report
• Frequency of Report
• Who is responsible for providing data
• Baseline performance (optional)
• Rolling average (optional)
• Variance
• Target Audience (Stakeholders most interested in this metric)

By including these fields you are achieving several key factors that contribute to performance success such as:

• Identifying key stakeholders / addressing stakeholder needs
• Creating organizational awareness of the metrics
• Gaining buy in on how performance is being measured
• Centralizing performance measurement
• Aligning performance to objectives
• Creating an environment of accountability
• Providing high level trend analysis

There are a rules of thumb to remember when setting up your metrics repository:

• Ensure database can be accessed by key stakeholders
• Develop a process for approving, populating and updating the database (similar to a change management process)
• Train performance management team and key stakeholders how to use database
• Enforce standards for providing complete and accurate entries
• Limit the number of performance measures by business unit (remember, your focus is to measure key performance measures that drive organizational success)

7 Steps to Developing a Successful Strategic Plan

Yesterday a client of mine asked me what I thought was the best way to execute a strategic plan and apply performance metrics to ensure success of the plan. This is a two part question which will be answered in two entries. Today, I'm going to discuss the best way to execute your business strategy, and tomorrow I'll get into how to integrate the performance plan into your strategy to ensure performance success.

A performance initiative cannot succeed unless executives have defined the organizational goals. Organizational goals must be defined and a strategic plan must address how these goals are going to be achieved in order for a performance initiative to be successful. There is no compromising here. Performance management depends on organizational goals being distributed and measured throughout the entire organization, originating from the executive board and communicated all the way down the line. Today's tip is going to discuss how to develop a plan that lays the foundation for your performance plan. Because without a solid plan, your performance initiative is setup for failure.

It's not uncommon for a smaller organization to have partially developed business objectives or a rough strategic plan, but still have a critical need to implement a performance management process. These seven steps will help guide you through the strategic planning process.

1. Organize a Leadership Team
2. Articulate Mission and Vision
3. Assess the Current Environment
4. Agree on priorities
5. Write the Strategic plan
6. Implement the strategic plan
7. Monitor and Evaluate

1. Organize a Leadership Team

The strategic planning phase requires a team of leaders, normally the executive board or a team of key management with CEO oversight. The strategic plan should identify this team and the wider community of present and potential stakeholders. If a decision is made to involve other stakeholders in the process, at which point will they be involved? Will an outside consultant or facilitator be necessary to assist with some or all of the process? Who will keep the planning on track, and what are the best ways to make the strategic plan most useful? How will questions be addressed and decisions made? These questions should be answered at the start of the planning phase.

2. Articulate Mission and Vision

Your mission statement will define the what, how and why of your organization's services. It should explain why your organization exists and what its objectives are. It should explain how your organization works to fulfill its objectives and its values. When wording the mission statement, consider your organization's products, services, markets, values, and concern for public image. The vision statement includes a vivid description of the organization as it effectively carries out its operations.

3. Assess the Current Environment

Now that you've answered why your organization exists, what it does and what it hopes to achieve, you are ready to assess your past and current state and begin identifying your future state. This activity is most effective when key personnel throughout the entire organization are involved. Outreach to employees can be achieved through town hall meetings, focal groups, surveys, emails, etc. Review services and performance against the mission and vision. At this point your organization may not have the proper data or tools to quantifiably measure this. That's ok, as qualitative analysis can provide you with a high level baseline assessment. Perform a SWOT Analysis; which is a look at the internal Strengths and Weaknesses, and the external Opportunities and Threats of your organization, for your current and future state.

4. Agree on priorities

Now that the mission is affirmed and critical issues are identified, the next step is to figure out goals, objectives and the strategy for attaining them. Goals are simply a clearer statement of the visions, specifying the accomplishments to be achieved when the vision becomes real. Objectives are clearer statements of the specific activities required to achieve the goals, starting from the current status. This is where the strategic planning process develops ideas and action steps, which are most effectively generated when delegated throughout management.

5. Write the Strategic plan

Once the mission has been communicated, strengths and weaknesses identified, and the strategies and goals agreed upon, the strategic plan is ready to be developed. This is where it all comes together. This is where the planning committee drafts the plan, and all key decision makers review it to ensure that the plan answers the key questions about objectives and can serve as a guide for the entire organization. A strategic plan will enable your organization to achieve optimal performance and embark upon a meaningful process of ongoing improvement.

6. Implement the strategic plan

The implementation phase begins with the development of the operating plan. The operating plan defines the short-term objectives that determine success and is tied to the operating budget and reporting cycles. Following the fiscal calendar, your organization can measure progress toward annual goals, and finance can offer feedback to guide other business areas. This is where the budget is established.

7. Monitor and Evaluate

In addition to implementing goals, objectives and strategies, an operating plan should be created to address how goals will be monitored and evaluated. The plan should be resourced at each board meeting. This will help keep the board and staff focused on the operational goals, and will maintain a culture of valued planning. The plan should be a living document enabling the flexibility to adapt to change.

If you apply these seven steps, your organization will no doubt be able to plan and execute organizational objectives and goals.

If you are looking for a performance management solution that focuses on applying the best practices and key processes that drive organizational success, check out my Free Performance Management Kit.

To learn about the 35 performance management best practices, the 48 key processes, 82 decision support techniques and more, go to The Peformance Portal.

8 Steps For Developing the Scope For a Winning Performance Initiative

Imagine trying to get 10 people that speak 10 different languages to work together and achieve a complex task. It would be extremely difficult no matter how intelligent the people were. This is how we have to think of our organizations...of intelligent people who aren't accustomed to speaking the language of business, or more specifically, the language of performance management.

If you've ever had to managed a project you know the importance of eliminating assumptions and making sure that all key stakeholders are looking through the same lens as to how the project will be carried out. In order to achieve this the first thing you did was document the project scope. Well, a performance initiative shouldn't be any different. Before you even think about implementing a performance program, you must first define the scope of your performance initiative.

The performance scope sets the boundaries for the performance management team. The performance scope defines the high level processes for how the performance management team will approach divisions, support teams and individuals to begin aligning performance to business objectives. Many times there is confusion about what falls inside the boundary of the performance initiative and what does not. Who all will be involved? What groups will be affected? Which groups will be excluded? The project scope ensures that everyone is viewing the initiative the same. Defining a solid scope and socializing it with the performance team, various project managers and key stakeholders is critical. Research has shown that defining scope and objectives are among the most important start-up activities to a successful performance initiative.

A common mistake made by organizations is not defining and communicating the scope of the performance initiative or only defining the initiative in general terms. This lack of definition causes managers and key stakeholders throughout the organization to make assumptions related to their own involvement to the initiative. As performance experts, our goal is to alleviate assumptions by clarifying roles, processes, and expectations. On large scale performance initiatives there is often push back from teams and individuals within the organization. Some even feel threatened (this is discussed in more detail in the 'Gaining Employee Acceptance' blog tip). A well communicated performance scope will help alleviate the politics that could slow down progress.

Performance management scopes are not a common process yet; therefore it may be a good idea for a consultant or a performance manager in charge of the performance implementation to put together a scope on their own to increase the odds of cooperation from the parties being evaluated.

Here are 8 high level steps for establishing your performance scope in a way that will minimize problems:

1. Define the outcome
2. Document assumptions
3. Define the scope of your performance initiative
4. Define deliverables
5. Define functionality
6. Define data
7. Define technical structure definition
8. Define enterprise/organizational structure

If you are looking for a performance management solution that focuses on applying the best practices and key processes that drive organizational success, check out my Free Performance Management Kit.

To learn about the 35 performance management best practices, the 48 key processes, 82 decision support techniques and more, go to The Peformance Portal.