Performance management and agilty
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The document discusses performance management and decision management. It argues that performance management primarily focuses on monitoring and supporting human decisions, while decision management makes system decisions more explicit. By combining both approaches, organizations can build "cockpits" rather than just dashboards to better monitor performance and control outcomes. Decision management involves automating decisions, exposing how systems make choices, and allowing experimentation to improve decisions over time. This gives businesses greater agility, control, and ability to better manage opportunities and risks.
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Performance management and agilty
- 1. Performance Management and Agility James Taylor, CEO
- 2. About me Independent consultant working with clients to help automate and improve decisions Previously a VP at Fair Isaac whereI developed the concept of Decision Management 20 years experience in all aspects of software including time in PeopleSoft R&D and at Ernst & Young Blogger, speaker, writer james@decisionmanagementsolutions.com
- 3. The one slide you need Performance Management measures and monitors supports people who make decisions But systems make decisions too Decision Management makes system decisions explicit The combination builds cockpits not dashboards
- 4. AGENDA 1 Performance Management or Performance Monitoring 2 The pilot analogy 3 From dashboards to cockpits with Decision Management
- 5. Performance Managementor Performance Monitoring? ©2009 Decision Management Solutions 5
- 6. ©2009 Decision Management Solutions 6 Understand drivers Manage risk Manage opportunities Greater agility Better decisions Control performance The power of performance management Control Understanding
- 7. ©2009 Decision Management Solutions 7 Understand drivers Manage risk Manage opportunities Greater agility Better decisions Control performance The barriers to performance Control People Computers Understanding Macro Micro
- 8. ©2009 Decision Management Solutions 8 Systems do But operationally, one transaction, or one customer at a time People don’t make many of the decisions in your business Risk and opportunity do not come only in strategic lumps Reality check
- 10. The business executive as fighter pilot
- 11. But cockpits have controls not just dials
- 12. And planes have auto pilots
- 13. And pilots learn on simulators
- 14. Decision Management Automates decisions So your systems have an auto pilot Exposes how decisions are made So you have knobs and dials Allows for simulation So you can experiment and learn ©2009 Decision Management Solutions 14
- 15. From dashboards to cockpits ©2009 Decision Management Solutions 15
- 16. ©2009 Decision Management Solutions 16 Decision Management is A business discipline that builds on existing enterprise applications to put data to work manage uncertainty increase transparency give the business control
- 17. 5 principles of decision management Little decisions add up so focus on operational decision making The purpose of information is to decide so put your data and analytics to work You cannot afford to lock up your logic so externalize it as business rules No answer, no matter how good, is static so experiment, challenge, simulate, learn Decision Making is a process so manage it ©2009 Decision Management Solutions 17
- 18. Decisions drive actions A choice, a selection Made after consideration Results in action not just knowledge ©2009 Decision Management Solutions 18
- 19. The business value of decisions Type Strategy Tactics Operations Economic impact Low High
- 20. “Making information more readily available is important, but making better decisions based on information is what pays the bills.” James Taylor & Neil RadenSmart (Enough) Systems 20
- 21. Business rules for agility, transparency
- 22. Analytics add business insight 22 X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X Descriptive Analytics Predictive Analytics Business Intelligence Optimization/Simulation Who are my best/worst customers? How do I turn my data into rules for better decisions? How are those customers likely to behave in the future? How do they react to the myriad ways I can “touch” them? How do I use data to learn about my customers? What has been happening in my business? How do I leverage that knowledge to extract maximum value from my marketing investments? Knowledge - Description Action - Prescription
- 23. Reduce time-to-action Business event Decision latency Action taken
- 24. ©2009 Decision Management Solutions 24 Delivering Decision Management 3 stages to better operational decisions Create a “closed loop” between operations and analytics to measure results and drive improvement Design and build independent decision processes to replace decision points embedded in operational systems Identify the decisions (usually about customers) that are most important to your operational success
- 25. The Decision Management technology stack Business Process Management Web Services PerformanceManagementKPIs VisualizationBI Adaptive Control Decision Service DescriptiveAnalytics PredictiveAnalytics Optimization DatabaseData Warehouse In-databaseAnalytics Business Rules Enterprise Platform
- 26. Action plan
- 27. ©2009 Decision Management Solutions 27 Shameless commerce Decision Management Solutions can help you Focus on the right decisions Implement a blueprint Define a strategy For assistance, to find out more or if you have questions decisionmanagementsolutions.com/learnmore
Notes de l'éditeur
- Significant investments have been made in performance management. These performance management systems create value by identifying opportunities or threats. But how much more value could you capture if you could rapidly and accurately change your systems to exploit these opportunities or address these threats? What if you could look at your dashboard and respond to what you learned by directly changing the way your systems, and thus your company, behave? This session will discuss the need to balance performance monitoring and decision management to maximize both awareness and agility. Decision Management transforms your investment in instrumentation into an investment in agility. Agility translates to direct impact on your key business priorities—cost competitiveness, differentiation, customer retention and growth. Agile systems make your whole enterprise more responsive to change.
- Greater agilityOrganizations that can see what is happening faster and use their data to understand the implications can re-set targets and plans, re-allocate resources more quickly. Performance management creates a culture of measurement and transparency and this makes it easier for companies to respond more quickly, with greater agilityBetter decisionsAnd peformance management, by putting data and analysis in the hands of decision makers, should improve the quality of decision making and support data-driven decisions. Control PerformanceSet and re-set targets, plans and resource allocations quicklyReduce costs and increase working capital by closely monitoring and understanding company spending.Increase profitability by gaining insight into your best and worst customers, channels, and products.Understand cost and profit driversManage RiskManage OpportunitiesDashboards and other performance management tools allow you to identify opportunities and threats more readily, more quicklyGood performance management tools also allow you to update risk management strategies and focus on opportunities more systematically nd consistently across the organization The ability to manage what-if scenarios and do simulations is particularly important in this regardUnderstand the impact of changes so you can align operational capacity and support functions with demand.
- But a dashboard-centric performance management approach is focused on people that make decisions, not systems who make decisionsPerformance management won’t deliver greater agility if the decision is embedded in a system, or better decisions if they are being made by a system and won’t give you much control over systemsSimilarly it is focused on macro drives, macro risk and macro opportunities not micro ones.How’s my risk profile changing not what’s my exposure on this transaction
- Real-time display of what is going onAggregated and visualized to make it easy to absorbIntegrated external data (the equivalent of GPS, mapping and terrain data)
- Most system dashboards are just instrument clustersReal cockpits have knobs, levers, switchesMust be able to act as easily as you can understandActions that are simple to take but which have complex outcomes
- More Automated Systems taking action in response to eventsMoving from human monitoring to automated monitoringIncreasing the range of actions that systems can take without waiting – avoid the mountain don’t tell someone its coming
- Potential ImpactLearn then DoExperimentationPractice for the “Big One”Executives need to understand the potential impact of their actionsAdaptive Control or Champion/Challenger is part of itApplying potential decisions to see what they impact would be before applying them is the next frontier
- At its heart a decision is a choice, a selection of a course of action. A decision is arrived at after consideration and it ends uncertainty or dispute about something.Decisions are made only after considering various facts or pieces of information about the situation and participants.Decisions select from alternatives, typically to find the one most profitable or appropriate for an organization.Decisions result in an action being taken, not just knowledge being added to what’s known.//Image copyright © iStockphoto.com/Alex Slobodkin
- Decision Management builds on a standard technology platform – typically an SOA oneUses the existing data architecture and performance management environment – provides contextSupports the move to BPM and web services/composite applications – more contextWithin this framework build decision servicesAutomate them using business rules and predictive models – rules for policies, expertise and analytics for analysis and experience.Enhance them using adaptive control and optimization – for learningNote there is no technology to simulate biases and pre-conceptions but that’s probably a good thingThere was a recent argument in the blogosphere between SAS and IBM on predictive analytics, optimization and business rules. They were taking pot shots at each other about who had what technology but I think they both tended to miss the point – we are trying to improve decision making here so let’s focus on that, the technology should be selected to deliver on that promise. You might need all of this or just some of it – that does not matter. Making better decisions does.
- Decision Management Solutions can help youFind the right decisions to apply business rules, analyticsImplement a decision management blueprintDefine a strategy for business rule or analytic adoptionYou are welcome to email me directly, james at decision management solutions.com or you can go to decision management solutions.com / learn more. There you’ll find links to contact me, check out the blog and find more resources for learning about Decision Management.