Organizations seeking to manage and improve performance often define key performance indicators (KPIs) to measure their progress. Comprising a measure and a target and usually analyzed by dimensions such as organization, customer, product, and geography, KPIs can help organizations quickly focus on activities that have the greatest impact on business performance.
Another significant trend in corporate performance management is the introduction of scorecards. Scorecards help organizations define overall goals—to improve corporate profitability or increase customer satisfaction, for example—and break those goals down into a series of objectives that will enable them to meet the goals. Each of these objectives and initiatives is associated with one or more of an organization’s KPIs, so progress toward each objective can be measured.
The recent release of Oracle Business Intelligence Enterprise Edition 11g provides a means of defining KPIs within your business intelligence (BI) metadata and of defining scorecards that make use of those KPIs. This column shows how KPIs are defined in this release and how they can be used to create a basic scorecard that measures progress toward a corporate goal.
The example in this column uses Oracle Business Intelligence Enterprise Edition 11g with the sample sales (SH) schema that comes with Oracle9i Database and later releases. If you want to walk through the steps and practice the techniques described in this column, download KPI_ORAMAG .rpd from oracle.com/technetwork/issue-archive/2010/10-nov/o60bi-170650.zip and install it, using Oracle Fusion Middleware’s Control feature in your environment. (See "Using Fusion Middleware Control to Upload a Repository and Set the Oracle BI Presentation Catalog Location" in Oracle Fusion Middleware System Administrator’s Guide for Oracle Business Intelligence Enterprise Edition 11g Release 1 [11.1.1]—at bit.ly/c4s39M—for information about how to perform this installation.)
For this column, suppose your organization has the following goals: improve performance by increasing sales, and improve the profit on those sales. These goals require monitoring performance against the targets for both sales and the margins on those sales, defining these as KPIs, and managing them through a scorecard. You will use Oracle Business Intelligence Enterprise Edition 11g to monitor these goals.Creating KPIs
Begin the process of meeting your organization’s goals by defining KPIs for monitoring sales and margins. To create the KPIs, take the following steps:
Figure 2: Defining the high and low thresholds for a KPI
Now that you have defined two KPIs, you can give users a means of displaying these on a dashboard through a KPI watchlist. To create a KPI watchlist, take the following steps:
Figure 3: The KPI watchlist, showing performance across all product categories
Now that you have defined your KPIs, you can arrange them into a simple scorecard to help achieve your organization’s goals. Using this scorecard, you will define an objective, "Improve Performance," that breaks down into two contributing objectives, "Increase Sales" and "Maintain Margins." Users will be able to use this scorecard to view progress toward the organization’s goal, either for all product categories or for any one category in particular.
To create the scorecard, take the following steps:
When adding this new objective, assign a KPI to it. To do so, use the Catalog panel on the bottom left of the screen and drag and drop the Sales Performance KPI onto the Objectives and KPIs list for the objective. Click OK to save this objective.
Your Strategy panel within the scorecard should now have a primary objective, Improve Performance, with two contributing objectives, Increase Sales and Maintain Margins, under it. To complete the initial scorecard, you will now create a strategy tree to show how these objectives are related.
To create a new strategy tree, navigate to the Strategy panel at the top left of the screen and this time click the View Strategy Tree button. When the strategy tree appears, expand the entries under the objectives to see the KPIs and their values, as shown in Figure 4.
Figure 4: Displaying scorecard objectives in a strategy tree
This strategy tree shows that the Sales Performance objective is being met across all product categories but the Maintain Margin objective is not, contributing to a warning about the overall objective. Use the dimension selector above the strategy tree to focus on individual product categories to see how each of them is performing against the targets and the thresholds you defined earlier.Summary
Organizations often use KPIs and scorecards to measure their performance in terms of reaching an objective, setting targets and thresholds to enable them to measure progress across the organization. Oracle Business Intelligence Enterprise Edition 11g gives you the ability to define these objectives and strategies within your BI environment, bringing this important measure of corporate performance to the desktops of everyone on your team.
Photography by Matic Kozinc, Unsplash