A significant impact on the company's profitability
An executive's experience is the cornerstone of reaching their objectives, and their business sense — what Americans call gut feeling — completes the diagnosis. It is nevertheless vital to have the facts in order to guide decisions.
Giving data value so it becomes information has nothing to do with how much data there is, nor with which technology is used. What matters instead is how aggressively those resources are exploited in creating — or discovering — new ways of doing business.
At that stage, having a management system is what makes the difference.
Management systems are built around business analytics concepts. They have three components:
A Business Intelligence tool: to present management concepts to managers through dashboards, and to make information available to analysts connected to their data cubes.
A single data repository: technically this is the data warehouse or data mart (the difference is size). All the data is exploited from here and turned into information; because it is single, there is no repetition and no reinterpretation of the data — a single version of the truth.
A management model: through it the business questions are answered, building management concepts into dashboards as the basis for designing the data warehouse model.
Management systems connect to transactional systems (ERP, CRM and others) and extract from them only the data that is relevant to decision-making. They are characterised by cutting across the organisation, joining data from different systems with business logic. Their mission is to deliver an automatic model for decision-making and to put all the information online for immediate availability.
The most important part of the management system is the management model. It has to answer every business question the management team has, through dashboards. For the strategic impact to be optimal, management has to answer the following questions before the model is built:
How can we distinguish ourselves from our competition in the market?
What is our distinctive capability?
Which key decisions in our processes require insights drawn from analytical processes?
What information is genuinely useful to the company?
Which indicators lever the company's performance through information and knowledge?
Starting from those answers, the management model is assembled by breaking each area's operational objectives down into KPIs grouped around the strategic objectives. The idea is to align individual incentives and metrics with the business objectives.
“What is not measured does not exist.” Let us secure success and high business profitability by implementing management systems.
