Manufacturers' expanding role in the global economy has brought about a need to change how executives, managers, and other consumers of business information make use of the data and information that crisscross their organizations every day.
With critical business processes executing in real time as much outside the enterprise as within its walls, traditional views of what constitutes business intelligence (BI) and how that intelligence is used for operational and competitive advantage are undergoing a shift that is best described as tectonic.
Further fueling this shift is the realization that the traditional, stand-alone reporting and BI capabilities of enterprise applications, such as ERP, supply chain management, customer relationship management, and the like, are woefully inadequate to meet the needs of today's manufacturers. The lack of internal standards for BI and the complexities that companies face through their own merger and acquisition activities — not to mention the near-continuous M&A activity in the BI industry itself — have rendered outdated the old model of matching information and business requirements.
What is needed is a new look at BI, described in the context of a comprehensive performance management solution. In this light, performance management becomes more than just a data collection and reporting function. The goal of performance management is to combine the best of BI — analytics, reporting, scorecards, and dashboards — with the concept that these tools must not only expose operational problems, but also direct users toward an understanding of why problems have occurred and what must be done to remediate them.
The push toward performance management couldn't come at a more opportune time for manufacturers. The continual monitoring and fine-tuning of critical business processes are essential not just for competitive success. Many manufacturers' very survival depends on being able to better understand and manage their performance in a brave new business climate where the playing field is growing increasingly global, and processes and goals are continually reinvented.
This broader view of mission-critical information encompasses data from traditional back-office systems, such as ERP, supply chain systems, and financial systems, as well as data about — and often from — external partners, customers, and other key stakeholders.
Meanwhile, inside the firewall, a vast quantity of internal data from the manufacturing shop floor and a host of interconnected systems and devices — HVAC systems, field service devices, and remote monitoring systems, among others — are also proving to be valuable resources for driving decision-making at all levels.
This proliferation of data sources also means that a greater number of users must have access to the data in the form of actionable information. On one hand, that access must be consistent with users' roles and requirements, tailored to solve a specific set of operational problems in a specific corner of an individual company or industry. And on the other hand, the information must be available — in the appropriate format — to be rolled up to the executive suite for strategic and tactical planning and reporting purposes. Finally, data from these disparate and disconnected sources must be able to be combined, regardless of formats, to build a comprehensive view of business performance that transcends technological and applications boundaries.
With so many rich data sources and a broad and complex set of requirements for user and role-based information delivery, performance management becomes a key strategic initiative that will help define competitive success in the 21st century. For many companies, performance management starts with developing a center of expertise, where corporate requirements and expertise can be consolidated and leveraged across the enterprise. For other companies, it requires a strategic look at mission-critical business processes with an eye toward building the technology infrastructure to support a comprehensive performance management initiative. And for many, that will mean jettisoning older, point solutions and silos of business intelligence for a newer, more comprehensive performance management platform.
Either way, the changing ways in which manufacturers interact with an increasingly complex business environment necessitate a shift from older, data-centric BI tools and applications to more comprehensive performance management solutions. To proceed into the maelstrom of the 21st century's business climate armed with 20th century tools is to do a disservice to stakeholders across the value chain. For manufacturers looking for a means to overcome these problems, performance management presents a welcome and timely solution.
Next class: The technological implications of the redefined business performance management.