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Measuring up How to maximize performance metrics by deploying technology to enhance business decision making and management Version 2.1 November 2, 2007 © 2007 by MaxMetrics. MaxMetrics is a trademark of MaxMetrics LLC and its related companies. All rights reserved. Trademarks are registered with their respective companies. © 2007 MaxMetrics LLC. All rights reserved. Page 1 MaxMetrics Management and IT Consulting Email: info@maxmetrics.com Web: www.maxmetrics.com Office Locations Germany MaxMetrics GmbH Waldhofer Strasse 102 69123 Heidelberg Germany Phone: +49 (0) 6221 825 740 Fax: +49 (0) 6221 825 741 USA MaxMetrics LLC 2625 Piedmont Ave Suite 56-101 Atlanta, GA 30324 Phone: +1 (404)759 2937 Fax: +1 (404) 261 6416 © 2007 MaxMetrics LLC. All rights reserved. Page 2 Table of Contents Introduction.................................................................................................................................................. 4 Benefits......................................................................................................................................................... 6 Considerations .............................................................................................................................................. 7 Data .......................................................................................................................................................... 7 Teams ....................................................................................................................................................... 7 Technology platform ................................................................................................................................ 8 Deployment.............................................................................................................................................. 8 Challenges .................................................................................................................................................. 10 Timing..................................................................................................................................................... 10 Technology ............................................................................................................................................. 11 Cost ........................................................................................................................................................ 11 Organization ........................................................................................................................................... 12 People .................................................................................................................................................... 13 Conclusions................................................................................................................................................. 15 About MaxMetrics ................................................................................................................................. 17 Table of Figures Figure 1 Technology in the Decision Making Management ......................................................................... 4 Figure 2 Information Process ....................................................................................................................... 4 Figure 3 Defining the Data Requirements .................................................................................................. 10 Figure 4 Data Preparation Value -vs- Cost Recommendations .................................................................. 12 Figure 5 MaxMetrics Capability .................................................................................................................. 17 © 2007 MaxMetrics LLC. All rights reserved. Page 3 Introduction What is new and different in today’s decision making and management process is the use of technology. Traditionally, instinct, gut, or only qualitative analyses were used in making key business decisions. Today’s decision-making and management business processes interjects technology as a key factor and tries to systematically provide useful data to the right people to facilitate informed decision making and management. Furthermore, data-driven decision-making and management methods provide insightful analysis on what could happen in the future, through various types of technological predictions and forecasts. With such information in hand, executives, managers and employees are better armed to make decisions and manage based upon carefully empirically solid analyses. Figure 1 Technology in the Decision Making Management In the quantitative decision making and management paradigm there is a technology platform which can be used to manipulate data and provide information. The information is used within an organization’s business process for decision making and management. Many different types of technologies – business intelligence, data warehousing, data mining, performance management – can form part of a technology platform. The technology platform is all about providing the solutions, tools, and techniques to support the information process. The information process relies heavily on the use of data: historical data, predictive data, forecasted data, and descriptive data in structured and unstructured formats. Using the technology platform, data is collected from a variety of input sources, analyzed to address specific business topics, and then provided to the business process to support decision making and management. Figure 2 Information Process © 2007 MaxMetrics LLC. All rights reserved. Page 4 The information process can be defined as the process for collecting data, transforming it from raw, unstructured data to business-use-ready data, deploying it, and then using it in the business. There are a number of challenges in making the information process a reality. Challenges related to the data itself. Collecting data takes time, the data is not always available, the data is not consistent across departmental boundaries, there are quality issues with data, and the data requires giga-, tera-, and peta- bytes of storage space (or lots and lots of space). Analyzing the data is not without problems. Which techniques and methods are used to perform the analysis? Do people within the organization have the right skills and competencies for the analysis? Competency. The people that know about the data, understand it, and use it on a routine basis have to be identified and made available for the initiative. They have to participate in analyzing the business processes and must define the standards for the data. Politics. Often there are political challenges around establishing information processes. Data initiatives compete with other programs and the operational business for access to people and other resources. Decisions have to be made about what comes first and what takes priority. There are issues around ownership; who owns what data, and can it be used in new and different ways. Credibility. Using data in the decision making process means that the right people must know that it exists, have access to the data, have the skills to apply it to the business process, and can trust the data enough to use it. While the challenges may seem daunting they are not insurmountable. Interestingly enough, most of the challenges are not only technology challenges but can be manipulated with technology. For each challenge or topic along that information process there are one or more types of software to address that challenge (along with several corresponding buzz words). Software vendors are driving massive business transformations as companies implement their technology. (Successfully) undertaking an initiative to transform the decision-making and management process into a quantitative method has to involve the business as well as the information technology (IT) departments. It will take a willful act of management to go through such a project and change the organization to use the results. © 2007 MaxMetrics LLC. All rights reserved. Page 5 Benefits Using an information process for decision-making and management can have positive financial benefits for an organization. It can compel an organization to the top of the market space, increase revenues, help to save or eliminate costs, meet regulatory requirements or improve corporate governance. An information process is applicable to and can bring benefit to every industry and most functional areas. Examples we have seen: A semiconductor solutions manufacturer improved business processes and saved over $45 million in under three years. An energy supplier achieved a comprehensive profile of its customers and cut expenses by 20% within four years. A military group saved $423 million using planning and business intelligence. A professional services group reduced budgeting time from two weeks to 24 hours. A bank quadrupled the rate of customer response to direct-mail solicitations. A bank met regulatory reporting requirements and earned higher profit margins. The following list indicates some areas where implementing a technology platform and information process could provide business improvements.

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