Executive Dashboards. The Key to Unlocking Double Digit Profit Growth. May 2009 Michael Lock

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1 Executive Dashboards The Key to Unlocking Double Digit Profit Growth May 2009 Michael Lock

2 Page 2 Executive Summary Aberdeen's latest research shows that companies actively building and using dashboards are able to gain visibility into metrics that are driving their business, and as a result are achieving drastically higher performance than their peers. From the executive management team down to the line-level business managers and "front-line" employees, the research shows that employees of all levels and functions are deriving value from the business visibility that dashboard tools provide. Best-in-Class companies are employing both strategic and tactical dashboard solutions in order to drive double digit improvements in profitability and have achieved substantial increases in customer service and sales performance. This benchmark report is based on feedback from 285 organizations globally. Research Benchmark Aberdeen s Research Benchmarks provide an indepth and comprehensive look into process, procedure, methodologies, and technologies with best practice identification and actionable recommendations Best-in-Class Performance Aberdeen used three key performance criteria to distinguish Best-in-Class companies. That performance relative to their peers was as follows: A 24% average year-over-year increase in operating profit, compared with a 3% increase for the Industry Average and a 27% decrease for Laggards An 8.3% average year-over-year improvement in customer service, compared with a 2.3% improvement for the Industry Average and a 1.0% increase for Laggards An 8.4% average year-over-year improvement in sales performance, compared with a 2.3% improvement for the Industry Average and a 0.6% decline for Laggards Competitive Maturity Assessment Survey results show that the firms enjoying Best-in-Class performance are: 2.8-times more likely than Laggards to have clearly defined business unit performance metrics 1.7-times more likely than the Industry Average to have a process for prioritizing data for user access 60% more likely than all other companies to leverage performance reporting dashboards Required Actions In addition to the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, companies must: Create a training program to educate end-users on dashboards Develop the ability to track the utilization of dashboard tools Examine the use of outward-facing customer dashboards Providing Dashboards to our business units has allowed us to identify detailed, actionable issues both globally at our facilities and individual improvements needed at the single facility level via drill down reporting. Continued monitoring allows us to document improvements made and react quickly when corrections are required. "It has also allowed us to more fully understand the unique market factors that may apply to an individual facility when an indicator is above or below a benchmark, but detailed research shows that this indicator level is appropriate for this facility in this particular market. ~ Jim Leonard, Vice President, IT, Quorum Health Resources

3 Page 3 Table of Contents Executive Summary... 2 Best-in-Class Performance... 2 Competitive Maturity Assessment... 2 Required Actions... 2 Chapter One: Benchmarking the Best-in-Class...4 Building a Case for Dashboards... 4 The Maturity Class Framework... 6 The Best-in-Class PACE Model... 7 Best-in-Class Strategies... 7 Chapter Two: Benchmarking Requirements for Success...10 Competitive Assessment...11 Capabilities and Enablers...12 Chapter Three: Required Actions...17 Laggard Steps to Success...17 Industry Average Steps to Success...18 Best-in-Class Steps to Success...19 Appendix A: Research Methodology...21 Appendix B: Related Aberdeen Research...23 Figures Figure 1: Dashboard Users Drive Performance Enhancements...4 Figure 2: Top Pressures Driving Dashboard Initiatives...5 Figure 3: Top Strategic Actions for Dashboard Implementation...8 Figure 4: Best-in-Class Expand Dashboard Use to More Roles...9 Figure 5: Process and Organizational Capabilities...13 Figure 6: Knowledge and Performance Management Capabilities...14 Figure 7: Best-in-Class Dashboard Technologies in Use...15 Figure 8: Best-in-Class BI Deployment Methods...15 Figure 9: End-User Satisfaction Drives Performance...20 Tables Table 1: Top Performers Earn Best-in-Class Status...6 Table 2: The Best-in-Class PACE Framework... 7 Table 3: The Competitive Framework...11 Table 4: The PACE Framework Key...22 Table 5: The Competitive Framework Key...22 Table 6: Relationship Between PACE and the Competitive Framework...22

4 Page 4 Chapter One: Benchmarking the Best-in-Class Building a Case for Dashboards As the economy fluctuates and information flows more quickly, the ability to gain visibility into business performance is ever more crucial to compete in a global marketplace and foster organizational growth. The problem for many companies is that the key metrics that dictate performance, the aspects of their business that they care most about, are constantly changing. These organizations struggle to make decisions based on the most up to date, most relevant information. Aberdeen s September 2008 benchmark report, Operational KPIs and Performance Management, demonstrated the tie-in between BI dashboard use and the need for more informed decisions. According to the research, the top business pressure driving companies to measure operational KPIs (Key Performance Indicators) through the use of dashboard technology is the need to replace gut-feel decisions with factbased decisions. Particularly in light of today s volatile market, organizations are developing strategies to better visualize how their business is changing and react quicker and smarter to threats and opportunities. Aberdeen's research shows that those companies that have employed dashboard technology to improve business visibility have seen marked performance improvements over their peers not currently leveraging dashboards (Figure 1). Figure 1: Dashboard Users Drive Performance Enhancements Percentage of Respondents 60% 40% 20% 0% 52% 30% Improved service - delivery performance to customer Using Dashboards 47% 21% Improved customer issue resolution speed Not Using Dashboards 37% 20% Improved sales - new pipeline accounts identified n = 239 Source: Aberdeen Group, September 2008 While information is never perfect and rarely delivered in true real-time, there is nevertheless a discernable need for faster and more digestible information. In the full BI stack from data collection and assembly to information delivery, dashboards represent the true front-end and are the Fast Facts Best-in-Class companies achieved: A 23% average year-overyear increase in revenue (organic / non-acquisition related) Compared with: A 3% increase for the Industry average A 15% decrease for Laggards In today s highly competitive, low margin business environment, we can t abandon our future focus making the personal contacts which are essential to generate tomorrow s business. We also can t afford to find out weeks after the fact that some critical aspect of our business, like poor asset utilization, is bleeding us to death. Dashboards allow us to see focused glimpses of near-realtime data, quickly performing health checks on key operations, alerting us immediately when we need to make operational corrections, and otherwise freeing us up to invest in essential face-time with potential customers. ~ Michael Bain, Division Director, Futron Corporation

5 Page 5 most user-facing solution geared towards improving business visibility. As such, dashboards are bridging the gap between some of the more heavy handed IT functions and the business leaders that rely on timely, accurate data. Prior Aberdeen research has revealed that a top pressure driving BI usage is the need to deliver analytical capability to more non-technical endusers. Due to the ease of use and intuitive graphical representations that most dashboards provide, these tools are perhaps the most logical medium for accomplishing a wider and diverse deployment of analytical capability. Aberdeen's April 2009 benchmark report, Moving Past Spreadsheets: What You Need to Know about BI Deployment Strategies, showed that one of the top drivers behind deploying BI was the need to bring analytical capability to more non-technical end-users. "Non-technical" is a crucial distinction for most companies. As technology continues to pervade the business landscape and business managers become more technically savvy, the line between IT and business is starting to blur. However, there is still an overwhelming need for transparency when it comes to the key metrics that drive business for an organization, particularly when it comes to the non-technical decision makers. Rather than making six phone calls and collating a dozen different spreadsheets to develop a view of the business, decision makers need a common platform that is easy to understand and modify in order to drive that better understanding. The need to gain this type of visibility into the business processes is the number one pressure driving companies to invest in dashboard technology (Figure 2). Fast Facts 51% of Best-in-Class companies reported a decrease in time-to-decision Compared with: 28% of the Industry average 19% of Laggards Figure 2: Top Pressures Driving Dashboard Initiatives Need to gain visibility into key business processes 43% Need to replace gut-feel decisions with fact-based decisions 37% Need to remove spreadsheet-based process to get to 'one version of truth' Need to improve timeliness and accuracy of business decisions Need to align business activity with company strategy 33% 30% 27% 15% 25% 35% 45% Percentage of Respondents, n = 285 The bulk of the pressures listed above relate back to two key themes that arise repeatedly in the BI world. First, companies are sorely in need of a way to increase their confidence in the decisions they make. That involves improving the quality of the underlying data by filling information gaps, and enhancing the relevance of all business information. Second, companies are

6 Page 6 consistently looking for ways to increase the speed of access to this data. The second most prevalent business pressure relates back to information quality. Confident decisions are made when a manager can combine experience and business savvy with fact-based information as a basis for that decision, rather than relying solely on "gut-feel." However, that confident fact-based decision is limited in effectiveness when the information arrives too late. Unfortunately for many organizations, these forces can work against each other and force a situation where a company must choose between relevant information and timely information. Therefore, improving the quality of business information and increasing the speed of access to that information are the overarching reasons why companies are turning to dashboard technology. Fast Facts 78% of Best-in-Class companies deliver dashboard functionality in a self-service, non IT-assisted capacity Compared with: 41% of Industry Average companies 37% of Laggard Companies The Maturity Class Framework Aberdeen used three key performance criteria to distinguish the Best-in- Class from Industry Average and Laggard organizations. Profitability: Year-over-year increase in profitability, measured as a weighted average increase in operating profit / EBIT (Earnings Before Interest & Taxes) Customer Service: Composite metric of customer service, measured as a weighted average year-over-year increase across three separate customer service metrics: o Customer satisfaction o Customer issue resolution speed o Customer retention rate Sales Performance: Composite metric of sales performance, measured as a weighted average year-over-year increase across three separate sales performance metrics: o New pipeline accounts identified o New accounts sold o Forecast to plan Table 1: Top Performers Earn Best-in-Class Status Definition of Maturity Class Best-in-Class: Top 20% of aggregate performance scorers Mean Class Performance 24% average year-over-year increase in operating profit 8.3% average year-over-year improvement in customer service 8.4% average year-over-year improvement in sales performance

7 Page 7 Definition of Maturity Class Industry Average: Middle 50% of aggregate performance scorers Laggard: Bottom 30% of aggregate performance scorers Mean Class Performance 3% average year-over-year increase in operating profit 2.3% average year-over-year improvement in customer service 2.2% average year-over-year improvement in sales performance 27% average year-over-year decrease in operating profit 1.0% average year-over-year improvement in customer service 0.6% average year-over-year decline in sales performance The Best-in-Class PACE Model Using BI dashboard solutions to achieve corporate goals requires a combination of strategic actions, organizational capabilities, and enabling technologies that can be summarized as shown in Table 2. Table 2: The Best-in-Class PACE Framework Pressures Actions Capabilities Enablers Need to gain visibility into key business processes Align business goals to key performance indicators (KPI) Focus BI efforts on front-end-user facing data (i.e. information delivery, reporting, visualization) Established method for defining strategic and tactical KPI Established information culture that values timely delivery of relevant data Clearly defined business unit KPIs that roll up to company strategy Ability to measure corporate performance against established KPIs Cross-functional team(s) to facilitate deployment of dashboard solutions Performance reporting dashboards Operational dashboards Executive dashboards Balanced scorecards Automated alert reporting tools Outward-facing customer dashboards Best-in-Class Strategies In an effort to address the top business pressures listed above, organizations are taking action from a strategic level in order to prioritize their business efforts. The data shows that the Best-in-Class are aligned with all other companies in terms of their priority of these strategic actions (Figure 3).

8 Page 8 Figure 3: Top Strategic Actions for Dashboard Implementation Align business goals to key performance indicators (KPI) Focus BI efforts on front -end user facing data Focus BI efforts on back -end data management Continually review KPIs to ensure agility during a volatile economy 28% 26% 26% 22% 60% 55% 52% 52% Best-in-Class All others 0% 20% 40% 60% Percentage of Respondents, n = 285 A common mistake many organizations make is to allow for misalignment between the overall strategy set forth by management, and the key metrics that the company measures itself against. For instance, if a key corporate initiative is to expand its presence in the mid-market, then measuring and compensating employees based on average deal size might not accurately reflect the company's success in realizing this strategy. By developing and managing to the KPIs that dictate success towards executing the company strategy, these organizations will be better positioned to perform toward that strategy. Achieving this alignment is a top strategic action for Best-in- Class companies as well as all others. Similarly, as the business environment fluctuates and corporate priorities change, companies need to continually update these KPIs toward aligning with the new strategic initiatives. Continually reviewing and updating these key performance metrics is also an important strategic action for all companies. Additionally, when it comes to managing the flow of enterprise information, companies need to understand the challenges inherent in both back-end data management as well as front-end data visualization. The chart above shows that organizations have prioritized the data management portion of this process lower than the visualization element. This data implies that these companies have already made the effort to build and maintain their data sources and are now more focused on making that information more digestible and visible to the business decision makers. While the Best-in-Class and all other companies report the same priority of strategic actions, the key to interpretation of this data lies in the performance listed in Table 1. If the overall objective is to achieve higher visibility of data and remove ambiguity in decision making, the Best-in-Class are simply executing better on their strategy than all other companies. We transitioned from a distributed Excel-dependent information environment to a centralized tool for pipeline performance BI, which has enabled us to challenge, revise, and sometimes validate our gut assumptions toward a more informed environment for business decisions. This has resulted in greater confidence in planning decisions for our management team and a willingness by our front line employees to provide accurate and timely information. ~ Larisa Parks, Director of Strategy, Sensis Corporation

9 Page 9 Aberdeen Insights Strategy The need for business visibility will always be prevalent at the executive ranks of a corporation. C-level executives typically drive the need for a common view of how different business lines are performing and, lacking the detailed knowledge of every facet of the organization, they strive for a simplified and strategic view of the company. Best-in-Class companies are more likely than the Industry Average and Laggards to use dashboard solutions with executive managers. However, the Best-in-Class are also far more likely to push dashboard capabilities out to some of the more "front line" employees in order to gain tactical operational visibility as well (Figure 4). Figure 4: Best-in-Class Expand Dashboard Use to More Roles Percentage of Respondents 80% 60% 40% 20% 80% 76% 76% 68% 67% 63% 61% 60% 59% 55% 57% 52% 43% 31% 24% C-Level VP Director Manager Line-level: Customer Best-in-Class Industry Average Laggard n = 285 Facing Several prior Aberdeen benchmark reports have demonstrated the need for pervasive BI. Companies of all shapes and sizes are looking for ways to deliver analytical capability and dashboard visibility to more employees within the organization. The foundation of this trend lies primarily in the need for faster and more relevant information demonstrated in Figure 2 above. In many companies, the strategic forward looking view of the business has already been achieved and they now strive for real-time, tactical information that can help improve day-to-day operations. Best-in- Class companies in particular recognize the need for this operational visibility and have made efforts to deliver dashboard technology beyond just the executive management and to more line-level employees. In the next chapter, we will see what the top performers are doing to achieve these gains.

10 Page 10 Chapter Two: Benchmarking Requirements for Success The selection of a dashboard solution and integration of its functionality with key business systems plays a crucial role in improving operational efficiency. The following case study demonstrates how one organization was able to leverage dashboards for considerable improvements in business visibility. Case Study Bausch & Lomb Bausch & Lomb is the eye health company dedicated to perfecting vision and enhancing life. Headquartered in Rochester, New York, Bausch & Lomb offers the world s most comprehensive portfolio of eye health products, and has one of the oldest, best known and most respected healthcare brands in the world. Initially, the IT environment at Bausch & Lomb was complex and fragmented, comprising numerous disparate reporting systems. Management was spending too much time compiling reports, trying to understand what everything meant, recalls Raj Chavan, IT Director for Global Information Management at Bausch & Lomb. Any specific metric backorders, fill rate, inventory turnover, etc. was defined by the specific business function and the criteria for those metrics could be different. We needed to move toward a global definition of each metric to ensure we were all measuring the same things and all looking at one version of the truth. After standardizing the IT environment around a common data warehouse and implementing a dashboard solution across the organization, Bausch and Lomb was able to improve efficiency on a multi-geographic basis. The discrepancies in reporting from country to country were easily visible, and the key decision makers were able to generate a common methodology for management reporting that could be used on a global basis. Perhaps the most important aspect of their dashboard initiative involved utilization of an electronic book that enabled dashboard information to be dynamically published in PDF form for easy, intuitive access. Leveraging this type of approach, Baush & Lomb was able to develop a strategy for dashboard reporting that was both strategic and tactical. The executive ranks had visibility into service levels, plant efficiency, and other high level metrics, while at the same time, operational managers could monitor the data that dictates day-to-day business efficiency and performance, all with one click of the mouse. With this type of comprehensive and pervasive approach to dashboard usage, Bausch and Lomb was able to gain visibility into key metrics like inventory turnover, customer fill rate, backorder information, all leading to improved cash management and significantly heightened levels of customer service and business efficiency. Fast Facts Best-in-Class companies achieved: 75 days average time-tocompletion of BI dashboard projects Compared with: 113 days for the Industry average 149 days for Laggards

11 Page 11 Competitive Assessment Aberdeen Group analyzed the aggregated metrics of surveyed companies to determine whether their performance ranked as Best-in-Class, Industry Average, or Laggard. In addition to having common performance levels, each class also shared characteristics in five key categories: (1) process (the approaches they take to execute their daily operations); (2) organization (corporate focus and collaboration among stakeholders); (3) knowledge management (contextualizing data and exposing it to key stakeholders); (4) technology (the selection of appropriate tools and effective deployment of those tools); and (5) performance management (the ability of the organization to measure its results to improve its business). These characteristics (identified in Table 3) serve as a guideline for best practices, and correlate directly with Best-in-Class performance across the key metrics. Fast Facts Best-in-Class companies experienced: A 20% average year-overyear increase in the number of BI dashboard users Compared with: A 13% increase for the Industry average A 10% increase for Laggards Table 3: The Competitive Framework Process Organization Knowledge Performance Technology Enablers Best-in-Class Average Laggards Process for collecting and formulating user needs for dashboard visibility 62% 41% 37% Process for prioritizing data for user access 55% 31% 27% Executive level support for dashboard initiative 80% 67% 51% Established information culture that values timely delivery of relevant data 66% 40% 21% Clearly defined business unit KPIs that roll up to company strategy 67% 38% 24% Clearly defined enterprise-wide KPIs underlying company strategy 62% 40% 25% Ability to measure corporate performance against established KPIs 69% 40% 37% Ability to track the utilization of dashboard tools 38% 23% 17% Performance reporting dashboards 77% 54% 42% Operational dashboards 71% 57% 46% Executive dashboards

12 Page 12 Best-in-Class Average Laggards 57% 48% 40% Balanced scorecards 46% 29% 28% Capabilities and Enablers Based on the findings of the Competitive Framework and interviews with end-users, Aberdeen s analysis of the Best-in-Class demonstrates that successful deployment and use of dashboards depends on a combination of specific capabilities and technology enablers. Aberdeen's research has identified several capabilities that Best-in-Class companies leverage in order to achieve elevated performance. Process As analytical capability grows within an organization, certain data sets hold greater value to BI users than others. Depending on the time of day or year, financial reports and analysis might be in high demand, whereas on a daily basis sales information may be the most relevant. The ability to prioritize and provide judicious access to these data sets is a key capability of Best-in- Class companies. The research shows that Best-in-Class companies are more than twice as likely as Laggards to have the ability to prioritize high demand data for user access. Additionally, as companies look to expand dashboard access across the organization, it is important to keep in mind the idiosyncrasies and specific needs of each line of business using the tool. The operations department will likely be using the dashboard solution for real-time or near real-time visibility, whereas the finance department might be using the tool more strategically. As such, their needs regarding latency and data access will differ. Companies who have established a process to collect and formulate end-user needs are seeing success not just in the adoption of the tool, but also in terms of end-user satisfaction. The data shows that Best-in-Class companies are 60% more likely than all other companies to have such a process (Figure 5). Fast Facts 66% of Best-in-Class companies report being "satisfied" or "very satisfied" with the ease of use of their dashboard solution Compared with: 40% of Industry Average companies 37% of Laggard Companies Organization Unlike many IT-centric software solutions that involve heavy lifting by the technical leaders of the organization, many dashboard solutions can be designed and implemented in a self-service capacity, without the involvement of IT. Dashboards are business tools geared toward business decision makers, and as such, their deployment often hinges on approval from executive management. Additionally, many companies have found success in dashboard implementation by clearly communicating the value of the solution to the upper echelon of management. In fact, 80% of Best-in- Class companies report having that executive level support for the dashboard initiative, while just over half of Laggards report that same support. Another key element of organizational maturity has to do with the

13 Page 13 culture of a company with respect to information. Certain organizations have an ingrained philosophy that values the efficient collection, assembly, and timely delivery of operational information. Best-in-Class companies recognize the need for having this type of philosophy and the data shows that the Best-in-Class are almost twice as likely as all other companies to have generated this type of information culture (Figure 5). Figure 5: Process and Organizational Capabilities Percentage of Respondents 70% 60% 50% 40% 30% 20% 62% 66% 41% 37% 40% Process for collecting and formulating user needs for dashboard visibility 27% Established information culture that values timely delivery of relevant data Best-in-Class Industry Average Laggard n = 285 Usually, we have ample data on which to make decisions, but the principal problem was that those data were not aligned between areas or departments. Decision makers were accessing the data without any clear direction. After we started taking a BI approach, the data started to make more sense, management could make better decisions, and the key staff members started collecting only the most relevant data. As a result we ve seen significantly increased productivity and improvement in the quality of decisions. ~ Ramon Lopez, Universidad Autonoma de San Luis Potosi Knowledge Management Chapter one discussed the concept of aligning business key performance indicators (KPI) to the overall corporate strategy. While all companies have at least a few metrics they track to determine how well the business is performing, the top performing companies recognize the need for a hierarchy of KPIs that effectively underlie the company strategy. The top layer of metrics is enterprise-wide, high-level, and applicable to all elements of the company. Profitability, revenue growth, and market share sustainability, might be company-wide metrics that all employees are beholden to, either directly or indirectly. The research shows that Best-in- Class companies are 94% more likely than all others to have defined enterprise-wide KPIs that underlie the company strategy. In addition to this top layer of key metrics, the top performing companies also have another layer of granularity in their measurements to capture line-of-business metrics that tie in to the enterprise-wide KPI, and eventually roll up to the corporate strategy as well. Best-in-Class companies are more than twice as likely as all other companies to have this second layer of granularity in their KPIs to track business unit metrics as well (Figure 6). Performance Management Like most enterprise software, the value of a dashboard solution increases as more people leverage the tool and get creative with its applicability. However, some companies suffer from the inability to verify the usage of the dashboard tool and a lack of understanding of what kind of a return that their dashboards are delivering, at least in a qualitative sense. If delivering dashboard capability to a wider set of users within the organization is a goal

14 Page 14 for an organization, then measuring the usage rate of the dashboard tool must also be a priority in order to validate that people are actually leveraging the solution. According to the research, Best-in-Class companies are twice as likely as Laggards to have the ability to measure the usage rate of their dashboard tool. Additionally, when it comes to company performance metrics, it stands to reason that in order to perform against the goals set forth by the management team, a company needs to develop the ability to measure those KPIs continually. It sounds like a simple task, but the fact is, not enough companies are actually measuring the company performance as compared to the established performance metrics. Best-in- Class companies are 76% more likely than all others to measure performance against KPIs (Figure 6). Figure 6: Knowledge and Performance Management Capabilities Percentage of Respondents 70% 50% 30% 10% 67% 69% 38% 40% 24% Clearly defined business unit KPIs that roll up to company strategy 37% Ability to measure corporate performance against established KPIs Best-in-Class Industry Average Laggard n = 285 With data being collected and presented by many departments in many different forms, it is absolutely critical that a balanced BI summary is presented to ensure effort and resource is prioritized accordingly. Data management is now more centralized and the management team has the cross-departmental visibility required to implement preventive or corrective actions efficiently. ~ Adam Roberts, Associate Director Global Support, QAIGEN Technology When it comes to dashboard technology implementation, the top performing companies have a comprehensive strategy that includes both strategic and tactical business visibility. Performance reporting dashboards can cover a wide array of applications, but typically these types of tools are used more strategically. Financial, marketing, and sales performance measurement tools drive that longer-term visibility that companies need in order to position themselves for stability and sustainability. The research shows that Best-in-Class companies are 83% more likely than Laggard companies to use strategic performance reporting dashboards. On the flip side of that same coin, companies also need visibility into the day-to-day performance of their operations in order to gain a tactical understanding of how to improve short term performance. Regardless of an individual company's definition of "real-time" or "business-time, day-to-day visibility through dashboard tools can help improve process efficiency and streamline the operational workflow. According to the data, Best-in-Class organizations are 42% more likely than all other companies to leverage operational dashboards (Figure 7).

15 Page 15 Figure 7: Best-in-Class Dashboard Technologies in Use Percentage of respondents 80% 60% 40% 20% 77% 54% 42% Performance reporting dashboards 71% 57% 46% Operational dashboards 57% Best-in-Class Industry Average Laggards Aberdeen Insights Technology 48% 40% Executive dashboards n = 285 Aberdeen continually measures not only what types of BI applications are in use in the end-user marketplace, but also how those tools are deployed. In terms of on-premise BI, this benchmark report further confirms data from prior reports that showed how Best-in-Class companies were moving away from the classic client-server model and towards a web server deployment (Figure 8). Figure 8: Best-in-Class BI Deployment Methods Percentage of Respondents 60% 40% 20% 0% 59% 46% On-premise BI: web server Best-in-Class 19% 33% On-premise BI: client-server All others 42% 30% BI integrated with other enterprise apps (e.g. ERP, CRM) 23% 6% SaaS BI n = 285 BI dashboard implementation has two critical dimensions that require completely different skills to succeed. One is data availability and quality. You deliver by having a dedicated competent team on all three fronts: analyst, IT and business. Secondly, you have business usage of the system. This I find is easier to address as users themselves will spread the word, as long as you ensure relevance of requirements and ease-of-use. And yes, there is a third dimension: users always want more of a good thing. So you need to agree on how to manage new needs in an environment where end-users often have the power to quickly raise visibility of their needs (or your shortcomings). On benefits well, it is incredibly reassuring to watch a company or department move from promoting new initiatives through statements such as My feeling is / Experience shows to Based on the careful analysis of the purchasing trend of our English customers in all three geographies where we serve them, we have concluded. ~ Jordi Martin-Consuegra, CIO, Dufry Another option for deploying BI / analytical technology involves either buying it pre-integrated with other enterprise applications such as ERP or CRM, or building the functionality as an add-on to these other enterprise applications. The data shows that Best-in-Class companies are more likely to take this route than all other companies. continued

16 Page 16 Aberdeen Insights Technology Finally, the deployment of BI using a Software-as-a-Service (SaaS) model continues to be one of the least used deployment methodologies. However, similar to several prior Aberdeen benchmark reports, this data showed that Best-in-Class companies are almost four-times more likely than all other companies to take a SaaS approach to BI.

17 Page 17 Chapter Three: Required Actions Whether a company is trying to move its performance in dashboard usage from Laggard to Industry Average, or Industry Average to Best-in-Class, the following actions will help spur the necessary performance improvements: Laggard Steps to Success Define sets of business unit KPIs that roll up to the overall company strategy. Aberdeen's research shows that having an intuitive, yet comprehensive hierarchy of KPIs is characteristic of a Best-in-Class company. The data shows that Laggard organizations are behind the curve when it comes to defining company-wide performance metrics that support the overall strategy. However, Laggards are even less sophisticated in defining a second level of KPIs specific to individual departments. The Best-in-Class are more than twice as likely as Laggards to have established business unit KPIs that support the enterprise-wide KPIs and eventually tie in to the company strategy. By developing this network of performance metrics, Laggards will be able to better focus the efforts of each department on the operational aspects that drive performance, thus positioning them better to execute on the company strategy and drive long-term growth and sustainability. Create a training program to educate end-users on dashboard functionality. In order to maximize the value derived from a dashboard solution, companies need to look for ways to ensure a high level of adoption across the organization. Offering training services to educate end-users on the functionality and applicability of the dashboard solution is a valid way of improving adoption. According to the Aberdeen's research, Laggard companies are almost three-times less likely than the Best-in-Class to have implemented a coherent end-user training program for their dashboard solution. Just about every level of employee and technical skill set can benefit from the visibility that dashboard tools can provide, but oftentimes employees are hesitant to introduce a new piece of technology into their daily routine. By implementing enduser training programs, Laggard companies will find that a little education can go a long way toward increasing adoption, and eventually improving the return on their dashboard investment. Utilize tactical dashboards for day-to-day business visibility. Most companies, including Laggards, are starting to understand the value of monitoring strategic elements of their business through the use of dashboard tools. However, when it comes to monitoring real or near real-time aspects of their operations, Laggards have been slower to adopt dashboard tools. According to the data, less than one-quarter of Laggards are using tactical dashboards within their Fast Facts 57% of Best-in-Class companies reported a decrease in time-toinformation Compared with: 43% of the Industry average 25% of Laggards Data collection was a tedious, time consuming process that left little or no time to drill down and analyze root causes. By standardizing and refining our data collection and translating it into a visual management tool, we were able to more effectively manage our processes. ~ Randy Harris, Labor Relations Supervisor, Thomas Built Buses

18 Page 18 operations. As the speed of business accelerates and employees need information faster to make changes and improve workflow, dashboards will become an important way of monitoring and optimizing operational efficiency. Industry Average Steps to Success Develop the ability to track the utilization of dashboard tools. Despite their purported ease of use, dashboard tools cannot be deployed blindly with the expectation that adoption will increase exponentially. Monitoring the use of the tools will enable an organization to track where underutilization is occurring and where more resources need to be applied toward educating the end-users. The data shows that Best-in-Class companies are 65% more likely than the Industry Average to have this important capability. By developing the ability to measure and track dashboard utilization, Industry Average companies will be able to optimize their dashboard deployment and apply the solution to the areas of the business that need it most. Establish cross-functional teams to facilitate deployment of dashboard solutions. While many companies strive for an enterprise-wide strategy that each employee supports, every department carries its own skill sets, competencies, and idiosyncrasies. When rolling out a dashboard tool, the top performing companies have seen success in creating cross-functional teams that represent multiple departments within the company. These teams have the ability to facilitate a cleaner, faster, and more targeted deployment of dashboard tools. The data shows that only 27% of Industry Average companies are currently leveraging these types of cross-functional teams. With multi-disciplinary representation on the implementation team, Industry Average companies can better understand the needs of the organization when it comes to dashboard visualization and reduce wasted effort and underutilization of the system. Leverage automated alert reporting tools. Even dashboard tools involve manual elements that can ultimately impede the efficiency of decision-making. Defining and monitoring key performance metrics is the first and most important step to improving business visibility. But once the thresholds are defined, the process still requires that a person monitor the system to ensure that each metric falls within the acceptable band. Automated alert reporting tools enable a company to remove this manual process of monitoring and will automatically alert the decision makers via , instant messaging, or other means that something is awry. The data shows that only 22% of Industry Average companies are using automated alert reporting tools. Having dashboard visualization into key business metrics is valuable only to the extent that it is monitored. If state changes occur when Fast Facts 34% of employees at Bestin-Class companies have access to a dashboard solution Compared with: 25% at Industry Average companies 23% at Laggard Companies

19 Page 19 the system is not being used, threats can be missed and opportunities can be lost. Automated alert reporting tools will provide faster visibility into these key state changes and allow for faster response. Best-in-Class Steps to Success Establish a BI center of excellence or competency center. One of most important measures of a successful BI deployment is gauging which users need analytical capability and how to best get it into their hands. In light of how widespread the applicability of BI can be within an organization (e.g., sales, marketing, finance, IT, customer service), having a cross-functional understanding of BI needs and where BI can best be used facilitates smoother implementation and more efficient use. A BI center of excellence is an independent internal organization that represents all departments and focuses on increasing the understanding of the BI system as well as training on the intricacies of its particular deployment. According to the research, only 29% of Best-in-Class Companies report having this capability. In order to drive dashboard functionality down into multiple areas and job roles within the organization, Best-in-Class companies can further improve their performance by creating a BI center of excellence to communicate best practices for dashboard deployment that will fit the various aspects of each line of business or function. Examine the use of outward-facing customer dashboards. Figure 4 showed that Best-in-Class companies have been very successful in delivering dashboard capabilities to more roles and functions within the organization. However, the visibility that dashboards can provide should not be limited to internal staff. Particularly in a contracting economy, companies need to look for more ways to be relevant and valuable in the eyes of their customers. Providing an easily accessed dashboard view into a customers' account information, order history, new product releases or discounted products and services just to name a few is a very powerful way of maintaining customer satisfaction and retention. The research shows that less than one-third of Best-in- Class companies are using these types of outward-facing customer dashboards. To survive and thrive in today's market environment requires innovation in terms of customer support, and using tools like outward-facing dashboards will help Best-in-Class companies achieve a superior level of customer intimacy. Investigate data cleansing technologies. The quality of decisions made through dashboard tools is only as good as the underlying data. According to the research, the number one complaint by Best-in-Class companies is that the data within reports and analytic views is not correct or clean enough for decisionmaking. By leveraging data cleansing tools, Best-in-Class companies Fast Facts Employees most underserved by dashboard technology: 1. Line-Level Knowledge Workers (admin, finance, inventory, etc.) 2. Line-Level Customer Facing workers (sales, customer service, etc.) 3. Power Users (not business users) 4. Managers 5. C-Level (CEO, COO, CFO, CMO, etc.)

20 Page 20 can ensure that their underlying data is timely, relevant, and clean. With a sound and reliable data infrastructure in place, Best-in-Class companies will be able to make more confident decisions and maintain or improve upon their current level of elevated performance. Aberdeen Insights Summary In the entire universe of business intelligence from data warehousing through ETL and integration to analytics and visual reporting dashboards are perhaps more palatable to non-technical users than any other element of that stack. However, that does nothing to mitigate the fact that the solutions need to be easy to understand and use, as well as truly improve an employee's ability to perform at his or her job. Ignoring a wide spectrum of bells and whistles when it comes to dashboard functionality, end-users need a solution that is intuitive, efficient, and versatile. Best-in-Class companies report user satisfaction that far eclipses all other companies across several different metrics (Figure 9). Figure 9: End-User Satisfaction Drives Performance Percentage of respondents 70% 60% 50% 40% 30% 20% 64% 31% 30% Response time to information requests Satisfied or Very Satisfied 66% 60% 40% 37% 28% 30% Ease of use Ability to create custom views or reports 68% 34% 26% Anywhere, anytime access to information Best-in-Class Industry Average Laggards n = 285 By fostering a culture of information, and leveraging appropriate training programs to help improve adoption and educate their end-users, Best-in- Class companies were able to achieve a heightened level of user satisfaction. This user satisfaction was instrumental for the Best-in-Class to address some of their top business pressures and gain visibility into their short and long term operations through the use of dashboards. Leveraging a strong foundation of organizational capability in conjunction with a strategic and tactical approach to dashboard implementation, Bestin-Class companies saw considerable improvements in customer service and sales performance, and were able to drive double digit improvements in profitability.

21 Page 21 Appendix A: Research Methodology Between April and May 2009, Aberdeen examined the use, the experiences, and the intentions of 285 enterprises using dashboards in a diverse set of applications. Aberdeen supplemented this online survey effort with telephone interviews with select survey respondents, gathering additional information on dashboard strategies, experiences, and results. Responding enterprises included the following: Job title / function: The research sample included respondents with the following job titles: procurement, supply chain, or logistics manager (9%); operations manager (9%); IT manager or staff (27%); sales and marketing staff (15%); director (20%); senior management (20%). Industry: The research sample included respondents from several industries. High technology / software was the largest segment with 21% of the sample, other industries well represented include finance (11%), manufacturing (15%), and public sector (7%). Geography: The majority of respondents (74%) were from North America. Most remaining respondents were from the Asia-Pacific region (13%) and Europe (9%). Company size: Twenty-five percent (25%) of respondents were from large enterprises (annual revenues above US $1 billion); 35% were from midsize enterprises (annual revenues between $50 million and $1 billion); and 40% of respondents were from small businesses (annual revenues of $50 million or less). Headcount: Forty-six percent (46%) of respondents were from large enterprises (headcount greater than 1,000 employees); 26% were from midsize enterprises (headcount between 100 and 999 employees); and 28% of respondents were from small businesses (headcount between 1 and 99 employees). Solution providers recognized as sponsors were solicited after the fact and had no substantive influence on the direction of this report. Their sponsorship has made it possible for Aberdeen Group to make these findings available to readers at no charge. Study Focus Responding executives completed an online survey that included questions designed to determine the following: The degree to which dashboards are deployed in their business operations and the financial implications of the technology The structure and effectiveness of existing dashboard implementations Current and planned use of dashboards to aid operational and promotional activities The benefits, if any, that have been derived from dashboard initiatives The study aimed to identify emerging best practices for dashboard usage in a variety of industries, and to provide a framework by which readers could assess their own management capabilities.

22 Page 22 Table 4: The PACE Framework Key Overview Aberdeen applies a methodology to benchmark research that evaluates the business pressures, actions, capabilities, and enablers (PACE) that indicate corporate behavior in specific business processes. These terms are defined as follows: Pressures external forces that impact an organization s market position, competitiveness, or business operations (e.g., economic, political and regulatory, technology, changing customer preferences, competitive) Actions the strategic approaches that an organization takes in response to industry pressures (e.g., align the corporate business model to leverage industry opportunities, such as product / service strategy, target markets, financial strategy, go-to-market, and sales strategy) Capabilities the business process competencies required to execute corporate strategy (e.g., skilled people, brand, market positioning, viable products / services, ecosystem partners, financing) Enablers the key functionality of technology solutions required to support the organization s enabling business practices (e.g., development platform, applications, network connectivity, user interface, training and support, partner interfaces, data cleansing, and management) Table 5: The Competitive Framework Key Overview The Aberdeen Competitive Framework defines enterprises as falling into one of the following three levels of practices and performance: Best-in-Class (20%) Practices that are the best currently being employed and are significantly superior to the Industry Average, and result in the top industry performance. Industry Average (50%) Practices that represent the average or norm, and result in average industry performance. Laggards (30%) Practices that are significantly behind the average of the industry, and result in below average performance. In the following categories: Process What is the scope of process standardization? What is the efficiency and effectiveness of this process? Organization How is your company currently organized to manage and optimize this particular process? Knowledge What visibility do you have into key data and intelligence required to manage this process? Technology What level of automation have you used to support this process? How is this automation integrated and aligned? Performance What do you measure? How frequently? What s your actual performance? Table 6: Relationship Between PACE and the Competitive Framework PACE and the Competitive Framework How They Interact Aberdeen research indicates that companies that identify the most influential pressures and take the most transformational and effective actions are most likely to achieve superior performance. The level of competitive performance that a company achieves is strongly determined by the PACE choices that they make and how well they execute those decisions.