Enterprise Dashboards: The Strategic Role of the CIO. Professor Vallabh Sambamurthy Eli Broad College of Business Michigan State University

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1 Enterprise Dashboards: The Strategic Role of the CIO Professor Vallabh Sambamurthy Eli Broad College of Business Michigan State University

2 Objectives How do firms compete effectively in the digital era? What are enterprise dashboards? How can CIOs contribute toward leading and catalyzing their enterprise dashboards?

3 Competitive Challenges in the Digital Era Business Results

4 Keys to Competitive Success Generating and sustaining high rates of innovation in products, services, business processes, and business models Crafting and sustaining intimate customer relationships through emphasis on customer acquisition, retention, and monetization Sustaining high levels of operational excellence and productivity across their operations Sustaining high levels of agility and resilience to withstand potential business threats and seize competitive opportunities Developing the insight and willingness to leverage current and emerging information technologies

5 Keys to Competitive Success Competitive success will require development of capabilities, structures and processes for Continuous innovation Customer intimacy Operational excellence Agility and resilience Information technologies provide the opportunity to facilitate the world class development of these capabilities Digital savviness Ability to acquire and implement important information technologies for the business Ability to apply information technologies in enhancing or building new business capabilities (e.g., customer relationship management)

6 What is the Business Challenge? Most executives focus on financial performance (e.g., profit, margin, sales) as indicators of competitive success Yet, financial performance is only a lagging indicator and the visible tip of the iceberg Important capabilities are intangible, difficult to measure, but they are the critical leading indicators of competitive success Financial Performance Continuous innovation Customer intimacy Operational excellence Agility and resilience Digital savviness

7 What is the Solution? Enterprise dashboards A commitment to managing the business from a broader perspective that emphasizes financial metrics and business capabilities Investment in processes for measuring and managing the intangible business capabilities Investment in tools and technologies for monitoring performance against the comprehensive set of financial metrics and business capabilities

8 What are Enterprise Dashboards? Based on the balanced scorecard framework

9 What are Enterprise Dashboards? They capture data about key performance indicators that are defined for each of the important elements of a firm s competitive performance Metrics for financial performance (margin, EPS, sales revenue) Metrics of customer relationship (customer satisfaction, number of new customers acquired) Rate of new product innovation (number of new products or services) Operational excellence (fulfillment cycle time, product defects, productivity) Learning and growth (quality of human capital, number of training programs) Enable executive decision making by showing comparative trends

10 An Example: CEO Dashboard

11 Another Example: CEO Dashboard

12 An Example: A Marketing Dashboard

13 Benefits of Enterprise Dashboards They help the top management team manage competitive success despite the growing complexity of their business and competition Attention to financial performance and the drivers of this performance (i.e., capabilities) They can be customized for the CEO and the leaders of key functions and processes Focus on specific key performance indicators related to the capabilities and financial metrics They can be automated to capture ongoing performance data and provide accurate and reliable information for executive action The key benefit is that the CEOs and other business leaders can focus on the few important indicators that enable their firm s competitive success, without getting inundated with lot of information

14 What should the be the role of a CIO? Engage and participate in the development of their enterprise s dashboard Most of the significant business capabilities are enabled through information technology Example, customer relationship management, data warehousing and data mining technologies CEOs, CFOs and other business leaders will increasingly value the contribution of their firm s IT function in designing and implementing effective dashboards

15 What should the be the role of a CIO? With the growing size and complexity of the IT function, CIOs should also develop and adopt a dashboard for IT management Traditionally, the performance of the IT function has been measured through cost of IT operations and reliability/availability of IT services However, the real value and contribution of IT lies in enhancing the firm s digital savviness What percentage of the business processes have been upgraded and modernized? To what extent is enterprise data available to guide analytics and decisions about customers, stores, and operations?

16 A CIO Dashboard Business Revenue Business KPIs Customer Satisfaction Profitability Service/product performance Business KPI Improvements Improvements in: Revenue, profitability Customer satisfaction Service/product performance Business Innovation New revenue Product enablement/features New business capabilities Innovation process measures Scope of impact Business Process Business Process KPIs End-to-end business process performance (reliability, efficiency, cost, compliance, asset productivity) Business Process KPI Improvements Improvements in business case for end-to-end business process: (reliability, efficiency, cost, compliance, asset productivity) Business Process Innovation Contract manufacturing Acquisition Integration Integration with partners Innovation process measures Operations Performance Project Performance Technical Innovation IT Availability, Reliability Cost benchmarks and trends Help desk metrics User satisfaction Information quality metrics On time On budget On scope User satisfaction Platform performance improvements Employee training/certifications Innovation process measures Operations Projects Innovation Performance Area 16

17 Conclusion The complexity of business and the growing pace of competition is compelling firms to develop comprehensive approaches toward strategic performance management Enterprise dashboards provide a solution by balancing attention between financial performance and the leading indicators based on critical business capabilities CIOs should engage in the development of their firm s enterprise dashboards because IT could provide a strategic platform for these initiatives CIOs should also focus on enhancing their firm s digital savviness by developing more comprehensive dashboards for the IT function

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