Measuring BI strategy success: How to turn data into action

Business intelligence (BI) efforts have value only when a company translates increased data visibility into performance improvements. However, for decades, traditional reporting tools have limited the value that businesses can gain from their data. The tools were rigid and slow, lacking the combination of two fundamental capabilities required to empower businesses to gain actionable insights from their data: the ability to cross data silos to generate end-to-end business performance reports, and the ability to interact with the data by filtering, drilling down and viewing different slices of data to identify and analyze performance drivers.

With recent advances in BI software, those capabilities are now possible, and it is time to put your BI strategy to the test. Are you using data to empower your team? Have you created a culture where everyone, from the CEO to employees on the front lines, uses data to make informed business decisions? The ultimate measure of BI strategy success is how you use your data to take action and drive improvements in business performance. Here are three tests to measure the success of your company’s BI strategy.

1. Drive behavior changes with scorecards. Consider a company in the managed services industry that was struggling with poor customer service quality. With thousands of customer touchpoints every day involving salespeople, call center operators, maintenance personnel and many others, there was endless data but little understanding of how to improve.

Knowing there was value hidden in all of that data, company leaders employed Microsoft Power BI to develop a scorecard of standardized metrics that could be filtered by department, location and other identifiers to enable performance analysis across the company. While important to understand the drivers of poor performance, the purpose of the scorecard was not simply to identify problem areas; the company now had to deploy the scorecard to influence behavior and drive performance improvement across the organization.

Managers filtered the scorecard for their department, reviewed the performance metrics and developed action plans with their direct reports, demonstrating to each individual how they could contribute to the organization’s success. At higher levels of the organization, those individuals were also managers who met with their direct reports to analyze the data and develop action plans. Now aligned behind a common goal, armed with action plans, and with daily scorecard updates to measure real-time progress toward the goal, team members across the organization started pulling in the same direction, implementing small behavior changes in their thousands of daily interactions to drive improvement throughout the customer experience.

Whether customer service, manufacturing quality or product sales, every company faces the challenge of turning endless data into actionable information. How much value are you getting from your company’s data? Are you empowering all team members with access to the data and providing visibility that allows everyone to be part of the solution? By deploying scorecards that provide transparency into your company’s goals and real-time progress, you can influence behavior across all levels of the organization. Use the data to create alignment, drive accountability and motivate all team members to prioritize performance improvement.

2. Push the limit on questions. As you begin deploying scorecards, avoid the potential trap of reports and dashboards becoming the measure of your BI strategy. For decades, data reporting was so tedious and time-consuming that it became its own mission, hamstrung by a BI industry that focused too narrowly on how to create better reports rather than on how to derive value from data. However, with recent advancements in BI tools, you can break those old thought patterns and focus on how to use the data to drive performance improvement.

To avoid the reporting trap, evaluate how you are using your data to make better business decisions. Expand your critical thinking and challenge yourself to ask new and better questions about company performance. Start flexing your question-asking muscles. You should no longer be satisfied with static data points such as last month’s sales numbers. Ask more questions, with the answer to each question triggering a series of follow-up questions. What was the change in profit margin from the prior month? How did the margin change by location and product line? Continue filtering and analyzing the data until you understand what drove the changes, and then follow up with action. Deploy scorecards to focus improvement efforts, measure progress and empower every team member to be part of the solution.

As you push the limit on questions and derive more value from your data, you will begin to shift from a focus on problem solving to a mindset of continuous improvement. At my BI consultancy, we call this “the art of the possible.” This is an important turning point for every company, when its BI strategy reaches a level of maturity that begins to yield step-level improvements. Once you start asking better questions, you will realize there is no limit to the questions that can be answered and actions that can be informed by the data.

3. Evaluate the impact of changes. As you begin asking better questions about company performance and deploying scorecards to drive improvement across your organization, you must determine whether the actions you implement deliver the desired outcome. Just as you have used the data to inform the actions, you must return to the data for answers rather than hoping or trusting that the changes you make actually help the business.

Are you analyzing the data and verifying the impact of changes at your company? Drill down below the top-level metrics to evaluate impacts across the business. Did the change create unintended consequences for a particular department or product line? Did performance in any segment improve beyond expectations? Look for areas of the business that need further attention, whether to correct a negative impact or to recognize success that can be replicated elsewhere.

Take care not to see only what you want from the data. As an example, a well-known consumer products company ran a holiday promotion offering customers a free gift with their purchase. Though the company incurred a cost for the gift, it believed sales would increase substantially enough to offset the margin impact from the added expense. Upon analyzing data at the end of the promotion, the company saw a significant boost in year-end sales and the campaign was deemed a success. However, that top-level number did not tell the whole story, as an increase in revenue is inherently expected during the holidays. To calculate the true impact of the promotion, the company needed to drill down into the data and compare sales to prior years, by retail location and more. Upon further analysis, the company decided not to repeat the promotion the following year; the revenue increase attributable to the promotion was not enough to offset the negative margin impact.

As you analyze your data to inform decisions and actions, employ the same rigor in evaluating the impact of those changes. Advance past the focus on problem solving and make room for critical thinking. There you will find that the data informs a cycle of continuous improvement opportunities.

Take the Next Step

Put your BI strategy to the test. Are you reporting on the past, or are you focused on performance improvement? Empower your team with scorecards to identify, communicate and measure improvement efforts. Flex your question-asking muscles to shift from solving problems to searching for opportunities for continuous improvement. Evaluate whether the changes you implement deliver the desired outcomes for your company. If your BI strategy is hindered by old ways of thinking, it’s time to turn your data into action.