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Level 4 – Analytical Business |

Level 4 – Analytical Business

Description

At the fourth level, a culture of measurement and accountability starts to evolve which helps drive the organization towards strategic success. The end-users are trained to process data properly, and they are able to use it effectively to make strategic and tactical decisions. Top management is trained and encouraged to use analytics in their everyday operations. A performance management competence centre is created which has enough resources and funding to achieve its goals. The competence centre is entirely separate from the line management structure and reports directly to senior management. Performance management has sponsors in senior management. The importance of accountability is emphasized throughout the organization and all performance owners are held accountable. Data and information are of high quality but still under constant observation. The organization understands that information is critical for business. Data and information become as important an asset as people, machines and money. Data warehousing solutions in particular are improving the quality of the data. The organization’s centralized data warehouse is dynamic and able to adapt to changing business needs. The data warehouses produce information in a form appropriate for the business of the organization.

The use of data to support analytics is emphasized at this level. The performance data is used to create trend analyses and to devise alternative scenarios, as well as to spot various patterns and conformities. The management can also visualize different scenarios that are happening in the business. Management attempts to understand correlations between different forms of data, and to learn from past business activities. The organization’s goals and objectives are defined and communicated effectively across the organization. Vision and values are developed together and, as a result, performance management also provides feedback for future strategy. Different scorecards and dashboards connect all the employees in the organization more closely to the organization’s strategy as the metrics and scorecards have a strong and direct link with the organization’s business strategy. The effective use of performance management drives business strategy.

Key Capabilities

  • Competence centre
  • Balanced metrics
  • Individual and external stakeholder metrics
  • Strategy planning and analysis
  • Rolling forecasts
  • Enterprise data warehouse

Next Steps

  • Integrate vision and goals fully in the organizational culture
  • Improve strategic planning and management skills, and embed them in organizational culture
  • Focus on training the end users
  • Expand the use of performance management beyond the confines of the organization itself
  • Revise operations and development plan continually
  • Use performance management to get an overall picture of what is happening in the organization
  • Use metrics and scorecards comprehensively
  • Integrate performance management into all levels of the organization
  • Use strategy map to illustrate the organization’s strategy
  • Start building a service oriented technological architecture

Maturity Levels

Components in Detail

Component Description for level 4
Communication Strategic goals are defined and communicated across the organization; frequent communication of the progress towards set objectives
Information Data and information are high quality; understanding that information is critical for business; all relevant performance data is available in data warehouse; data is available for every measure; performance data is used for analysis
Intangible assets People are formally committed to strategy process; people are trained to process data; sponsors come from senior management; competence centre that reports directly to senior management
Management and responsibility The importance of responsibility is stressed; all performance owners are held responsible; management principles are defined and followed
Methods and tools Processes are defined, followed and monitored; organization is proactively looking for new methods and tools; methods are combined appropriately; methods and metrics are becoming closer
Performance Role in individual level increases; performance-based compensation program; metrics are in balance; improved performance and added value from analytics; KPIs are focused frequently; stakeholder scorecards; metrics refines existing metrics; rolling forecasting; strategic planning and analysis
Scale and scope Organization-wide analytical plan and framework for metrics; vertical and horizontal expansion; performance is managed at every organizational level
Strategy and Business Lessens the gap between strategic planning and execution; metrics have a direct and strong impact on organization strategy; scorecards and dashboards connect employees to strategy; investments starts to pay off; funding is easy to obtain
Technology Centralized organization-wide data warehouses; data warehouses constantly consolidates analytical structures; flexible and layered architecture; solution drives everyday functions in the organization; hybrid technologies; integrations between applications

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