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Posts Tagged ‘Process Management’

In his recent blog titled Data and Process Transparency Jim Harris makes the case that “a more proactive approach to data quality begins with data and process transparency”. This is very true of any organization striving towards availability of highest quality data for its decision-making as well as efficiency of business processes.

In order to embed transparency in every situation across organization, organizations need to be data driven. After all, what does it mean to be data driven organization, you may ask? There is great deal of literature around this topic in print as well as on the web. I will try to simplify this discussion and say that, to me, when culture of decision making is purely based on the factual data (KPIs/Metrics etc…) within an organization (and not on gut feel, emotions and subjectivity of decision making individuals), organization can be said to have become a data driven organization. Of course, this is a very simplistic definition (just for the purpose of this blog).

Many a times, depending upon organizational maturity you may have organizations which are completely data driven versus organizations which are more mature in one area (vis-a -vis data driven decision-making) versus other areas of the organization. For example, in some cases finance side of the organization might be much more data driven than either marketing or sales site etc.

Using data to make decisions drives both data and process transparency across organization. It discourages use of anecdotal information (and gut feel) and forces people to think in terms of realistic data and evidence presented by data. Also using specific KPI’s/metrics allows organizations to clearly define issues associated with underlying data or business processes more readily.

For example, if the sales operation team is discussing order return rates, they cannot simply say that we have a very low order return rate because of poor addresses in a “data driven organization”. They will say that they have 1% order return rate for (on average) 125,000 orders they ship every month because of the poor shipping addresses. This way of expressing performance not only helps everyone involved in understanding the importance of good data quality but also helps organization with creating sensitivity around capturing good data to begin with. Also expressing performance this way helps with ready-made business case for supporting underlying data management initiatives.

Transforming organizations to a data driven organization is a gargantuan change management task. It requires significant cultural/thinking change up and down the organizational hierarchies. During such transformations, organizational operational DNA is completely changed. Obviously, the benefits and rewards of being the data driven organization are immense and worth the efforts of transformation.

On the other side, during the data driven organizational transformation if organizations find that data is not of reliable quality, this finding will force data management discussion across organization and help kick start initiatives to fix the data as more and more in the organization start using data for decision making.

In end, I would encourage everyone to be as data driven as possible in their decision making and influence areas within your organization to be data driven. As data professionals, this will allow us to be more proactive in addressing data management challenges for the organization.

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In last post about Data Governance Litmus Test, I outlined 10 questions which could be used as a litmus test to figure out, how you are doing in terms of garnering executive sponsorship for your data governance initiatives? In this post, I’m going to explore why it is important to know organizational KPI’s/initiatives before and during data governance initiatives.

KPI’s or metrics which are looked at by CXO’s are the clear-cut indicators of where the organizational focus is from the perspective of operational excellence. They also serve as an early indicator of overall organizational strategy. Knowing these KPI’s firsthand helps the teams involved in data governance initiatives in internalizing what is important for the organizational strategy? Also it helps with understanding where executive focus is within the organization?

Many times when I asked this question (which KPI’s are being tracked by executive management) to the teams working on data governance initiatives, I typically get standard answers. “Our executives are looking at sales, cost related KPI’s.” This is a clear indication that the team has not made significant effort in understanding the KPI’s, establishing communication channel with executive management and has not emphasized the need for understanding KPI’s by the data governance team.

While ultimately the goal of organization is to increase revenues, minimize the cost and maximize profitability, there are several steps and ways by which these goals are achieved. From marketing, procurement, finance to sales there are specific goals which are set as a part of achieving business plan and these goals are tracked by executive management team on a periodic basis. Many a times these goals will change from time to time to adjust for change in strategy as well as changes in the overall goals. Understanding the details of the KPI’s across different parts of the organization helps data governance teams to link their activities to specific KPI’s and results associated with those KPI’s.

The process of getting engaged with executive management and make a case to understand KPI’s in detail helps in multiple ways to the data governance initiative:

1.     It helps with establishing communication channel, credibility, relationship with executive management and their goals/mission.

2.     It gives the team visibility into very specific KPI’s which are important for organizational growth, growth of individual executives within the organization.

3.     It helps create the context to the data governance discussion, change management process across the entire organization. No one can dispute the need/requirement for the reporting and improving these KPI’s.

4.     Once you establish a communication channel/relationship with executives around these KPI’s, and if you are able to demonstrate the value you and the initiative which you are proposing(data governance) can add to the KPIs, executives will get in the habit of involving data governance team as and when either KPI’s change or there are issues with reporting KPI’s.

5.     The confidence and trust relationship which you can build through this exercise will make it easy to ask for executive sponsorship. Executives will be more than willing to support your initiatives as they see a clear line connecting data governance  initiatives with their KPI’s and progress.

The process of getting to know these KPI’s is important one. When understanding the KPI’s or collecting information about these KPI’s, it is important to collect significant details around KPI’s:

1.     Name of the KPIs

2.     How executives are defining these KPI’s, that is in executives mind how this KPI is measured and calculated

3.     Understand from executive perspective, which business processes impact/influence this KPI, which roles and possibly names of the people will have the most influence on the outcome of this KPI.

4.     Periodicity: how often is this KPI reported on?

5.     Establish clear linkage between this KPI and a specific organizational strategy ultimately rolling up into the vision leadership has created for the organization.

6.     It may be beneficial to understand how these KPI’s will help executives in achieving their personal goals

As always, devil is in details. If CFOs goal is to reduce DSO, then being able to understand from CFO’s perspective how DSO is impacted by collection processes, CRM processes is important. For all you know unclean addresses might be at the root of lack of ability to collect the payments (at least one of the reasons behind larger DSO number). If you followed recommendations above you will be able to tangibly demonstrate linkage between cleanliness issue and DSO and will be able to garner support from CFO on this issue on a ongoing basis.

At this stage I am not focusing on specific technology investments, but as you can see any technology solution which will allow you to capture strategy, KPI’s and link business processes to these artifacts will be a good solution to capture this information.

In my next post around the litmus test questions, I will explore the need for understanding the specific goals around these KPI’s.

Previous relevant posts:

Litmus Test for Data Governance Initiatives: What do you need to garner executive sponsorship?

Suggested reading next:

Data Governance Litmus Test: Know goals behind KPIs

Data Governance Litmus Test: How and who is putting together metrics/KPIs for executives?

Data Governance Litmus Test: Do You Have Access to the Artifacts Used by Executives?

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