With the New Year upon us many organizations (and individuals) are putting plans in place for 2009. There are lots of discussions of strategic objectives, goals, critical success factors etc.
The biggest challenge sorting through the planning process is to have a framework in place so that the plan moves an organization towards the right goal and that it can be tracked along the way so corrective action can be put in place. The key is to have metrics in place that provide coverage across the strategic objectives and critical success factors. A few things to keep in mind about metrics:
- People need to be able to trust the metrics. Business Intelligence provides the tools and methodology to ensure that the metrics are measured, collected and reported in a robust fashion.
- Not all metrics are created equal and serve the same purpose. David Parmeter provides an excellent discussion about the distinction between various metrics and how they link to critical success factors in his book Key Performance Indicators Developing, Implementing,and Using Winning KPIs. He seperates what is simply a performance indicator and what is a key performance indicator (KPI). Specifically a KPI are those metrics which have a significant, actionable impact on an organization.
- Consider using a Balanced Scorecard (or Strategy Map) approach created by Kaplan and Norton to ensure you have metric coverage across the various facets of your organization. Organizations are complex and using metrics within a Balanced Scorecard can help track all the assets which contribute to an organization's success.