ERP and Business Intelligence: Key Performance Indicators

In our last post on ERP and business intelligence (BI), we saw how BI helps to free data analysts from spreadsheets. Now let’s look at another way that BI increases employee value, specifically through key performance indicators (KPIs).

Within enterprises there’s often a disconnect between the strategic goals established by members of the C-suite and the daily activities of employees. Using a robust BI solution like SAP BusinessObjects, companies can set up KPIs to effectively communicate strategic direction down through the organization. This involves routing the right information to the right people at the right time, in order to improve decision-making.

For example, let’s take a small-business owner who runs the enterprise on the following KPIs: utilization and margin. The owner hires a sales rep, who only pays attention to revenue targets. Revenue, however, doesn’t matter to the owner, as it falls outside the established KPIs. The salesperson could generate tremendous revenue without necessarily enhancing utilization and margin, but if those two particular KPIs reach the right levels, revenue will occur naturally as a byproduct.

In order for the owner and salesperson to get on the same page, they need access to the same, good data. An effective BI deployment will give the rep a dashboard or well-formatted report that allows visibility into available resources for driving revenue, as well as margins based on hourly rate and details about utilization. With all of that information pulled together in one place, the rep can make better decisions about selling—ultimately supporting the owner’s strategy and increasing revenue as well.

The same principle holds true for larger companies. If management establishes on-time delivery as a KPI, decision makers can compare current and past delivery numbers to understand how well the company is performing. If the news is bad, SAP BusinessObjects allows a drill down on the data, via hierarchies relating to products, personnel, etc. At this point, the executives can see which regions inside the company are underperforming, and then contact the heads of those regions. The subsequent conversations might reveal, for example, that certain SKUs are underperforming because of an insufficient product pipeline, giving the decision makers an understanding of the situation and the opportunity to make improvements.

In both these examples, BI gives C-suite members the ability to carry strategy throughout the entire enterprise. With the right information available at the right time, organizational alignment becomes possible. For more information on how itelligence delivers the power of BI with SAP BusinessObjects, click here.

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