How to report performance metrics so that the most appropriate behavior occurs is provided in this video.
Predictive analytics goes beyond historical statements to providing an assessment of futuristic expectations.
The Integrated Enterprise Excellence (IEE) Business Management system provides predictive measurement reporting. IEE 30,000-foot-level reporting involves predictive analytics when providing futuristic statements for process-output performance measures and scorecards.
Within traditional management, future-date-performance-measurement goals are set. Goals are important; however, businesses consist of processes. Effective, long-lasting business improvements are achieved when processes are enhanced. When setting a specific time-frame-goal, improving processes is not typically undertaken since this effort can take too much time and resources are unavailable. Hence, what typically occurs in a business management model of meeting-the-goal-or-else is playing games with the numbers or other unhealthy activities.
Business organizations need a business management system that has predictive scorecards, which encourage behaviors that benefit the enterprise as a whole. Common place red-yellow-green goal-based scorecards can lead to silo improvement efforts that result in much firefighting. In addition, traditional metric reporting that consists of a table of numbers, pie charts, or stacked bar charts are not predictive and provide only a snapshot of the past with no assessment of what is expected in the future. Also, variance to metric goals can lead to playing games with the numbers, which can be destructive to the business as a whole. The balanced scorecard approach for choosing metrics after strategy selection can lead to subjective metrics and measurements that are not long-lasting and are a function of economic and leadership changes. Described is an overall corporate performance management (CPM) system where organizations can analyze their predictive value-chain metrics collectively with other considerations, such as the current business-economic environment and the Theory of Constraints (TOC), to develop strategies.
These enhanced predictive analytics examples illustrate the power of providing futuristic statements in business management system scorecards and how to create this form of enhanced performance measurement reporting.