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October 1, 2003

Ventana Research Product Assessment Guide for Performance Management

More than 60 products scored for their ability to meet business requirements

by Mark Smith

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Real-World Business Examples Applying the DecisionCycle

Every organization can use the Ventana Research DecisionCycle methodology to improve any business process, organizational unit, or business area. To demonstrate the full potential of the DecisionCycle to assess, evaluate, and select the appropriate BI solutions for your performance management projects, here are two real-world examples.

Manufacturing

A manufacturing company must manage a particular product line to ensure profitability. This is a significant challenge that requires collecting information from across the organization. The tools that users need to achieve the goal of managing the product's performance are critical. This business challenge applies to all organizations that sell products or services to customers.

1. Define business goals. The mission of the business project is to maximize product sales while maintaining manufacturing costs to achieve product profitability, which will improve the financial statement margins and stakeholder value.
2. Define business requirements. To achieve the goal, the company must assess product performance across customers and determine ways to maximize marketing and sales efforts. In addition, the company must look for ways to keep manufacturing and operational costs at or below their current level.
3. Define user community. The users involved in this project will span across communities. The company used the predefined user categories of the Ventana framework as a basis.
• Management will set goals and assess progress, along with having access to high-level operational, manufacturing, and customer performance data.
• Analysts must determine how they can achieve the goals set and outline the methods for the rest of the organization in order to reach the objectives.
• Business users will have the capability to monitor efforts on a weekly basis and guide individuals toward targets.
• Information consumers will have the ability to understand their contribution and align their efforts on a daily basis.
4. Define functional requirements. Using the predefined functional requirements outlined in Table 1 or the PerformanceCycle section, you determine the needs of your users. Based on this determination, you can either list the needs across all users or group it by user classes to rank each functional capability by how essential it is for users. In this example, users have the following needs:
• Management must set goals, assess progress, benchmark performance, and have access to information to analyze key performance indicators. Managers' requirements include Access, Discover, Interact, Collaborate, Target, and Score.
• Analysts must model customer segments and analyze product-related supply chain information to optimize marketing and selling. Analysts' requirements include Model, Access, Discover, Interact, Project, Collaborate, Inform, and Automate.
• Business users across sales, marketing, and manufacturing must analyze and monitor customer and product information that is relevant to their roles and responsibilities. They must communicate issues and opportunities for meeting business goals. Business users' requirements include Access, Discover, Interact, Collaborate, Act, Score, Inform, and Automate.
• Information consumers must understand their performance and have their actions aligned to the business goals. Individuals' requirements include Collaborate, Act, Score, Inform, and Automate.
5. Define functional capabilities. Choosing from the predefined functional capabilities outlined in Table 1 that best meet your functional requirements, you assemble a list of questions for software vendors to answer.
6. Determine master list of vendors. At this step, you determine the master list of vendors that most closely align to the functional requirements and capabilities. You do this by determining a scoring mechanism to reduce the total numbers of vendors that you can more closely examine for the project.

While steps 1-6 of the DecisionCycle methodology focus on matching users' needs to vendor capabilities, steps 7 and 8 involve defining business and technology requirements other than user needs that you will use to determine the short list of vendors that you will fully evaluate for your business project. Then, you will match capabilities and project experience from your vendor short list to your company's specific strategies and technologies, leading to final selection of a vendor.

Telecommunications

A telecommunication company must optimize its customer interactions to maximize revenue and achieve higher levels of customer satisfaction. This business challenge applies across organizations that sell product or services. This scenario requires a complete understanding of your customers and how to develop effective offers to them through any channel.

1. Define business goals. The mission is to increase revenue by optimizing customer interactions across all channels, which will improve revenue and maximize return on investment in CRM technologies.
2. Define business requirements. To achieve this goal, you must develop customer models that will determine how to target the customers that are most likely to purchase products. The result will be to develop interaction campaigns across all channels. Then you must assess and optimize performance of the interaction campaigns.
3. Define user community. Again, the users involved in this project will span across communities.
• Management must assess progress, along with having access to high-level key performance indicators to assess performance across the customer base.
• Analysts must build customer models and analyze the supply chain to determine which products will be promoted through which channels.
• Business users will have the capability to monitor efforts on a weekly basis and guide individuals toward the target.
• Information consumers will be influenced by sales, service, and marketing efforts on what to offer customers. They will have the ability to understand their performance as compared to others and align their daily operational roles.
4. Define functional requirements. You perform the same tasks as in the previous scenario at this stage to determine the capabilities required by each user class:
• Management must set goals, assess progress, benchmark performance, and understand the effects on the bottom line. Functional capabilities required for managers include Discover, Collaborate, Target, and Score.
• Analysts must model customer segments, develop target customers with recommended campaigns, and analyze results to optimize customer relationships. Functional capabilities required for analysts include Model, Access, Discover, Interact, Project, Collaborate, Integrate, Act, Inform, and Automate.
• Business users across sales, marketing, and service must analyze and monitor customer behavior and communicate issues and opportunities to analysts and management. Functional capabilities required for business users includes Access, Discover, Interact, Collaborate, Act, Score, Inform, and Automate.
• Information consumers must take recommendations that are presented to them in operational systems, portals, or any application they use while interacting with the customer. Customers will also receive recommendations via e-business interactions and will have the opportunity to dynamically react to the campaign. Functional capabilities required for individuals include Collaborate, Act, Score, Inform, and Automate.

Steps 5 and 6 are the same as in the previous scenario to achieve a master list of vendors that best meet your functional requirements.

Again, Steps 7 and 8 involve DecisionCycle processes not discussed in this report.

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