Beyond the Dashboard White Paper A solution that integrates analysis throughout the entire decision-making process is essential to creating an analysis-decision-action loop to maximize the enterprise s return on experience.
ii About the Author Gabriel Fuchs is a renowned expert within strategic IT solutions, including business intelligence, performance management and business analytics. He has worked within a range of different industries and activities all over Europe, helping organizations aligning key operational activities with the strategic goals. Gabriel also writes articles on IT-related matters for specialist journals and is a regular columnist on IT and management in several publications, and speaks on strategic IT at industry conferences. Table of Contents About the Author...ii Table of Contents...ii Visualizing Better Business Decisions...1 Visual Interactive Analytics...2 Visual Interactive Dashboards...3 Integrating Analytics and The Dashboard Closing the Loop...4 The Visual Interactive Closed Loop...5 Beyond the Dashboard...6
Visualizing Better Business Decisions Abstract Data visualization today is very much focused on analyzing large and complex sets of data, and the advantages of this approach are widely accepted. Charts are also the preferred way to highlight key performance indicators (KPIs) in dashboards, allowing management to get a quick overview of their business. Both these activities ultimately aim at improving an organization s business decisions. However, the integration between the analyses, the resulting decisions and the follow-up on these decisions commonly in dashboards is often lacking. The dashboard is a popular means of presenting and viewing this kind of information; however there are shortcomings that must be recognized. Integration between the analyses, decisions and actions is lacking in these solutions. Far too often, the follow-up of the business decisions is disassociated from the initial analyses, thereby hindering proper feedback. Furthermore, business performance demanding action is often communicated in one-way distributions of static reports, robbing the business user of both the opportunity to interrogate the data utilizing his or her own expertise, and the opportunity to participate in the analysis. A closed loop, with a tight integration between the analysis and the dashboard, is essential to improving this decision-making process. The result of not having such a closed loop system is a poor Return on Experience (ROE), leading to both repeated business mistakes and missed business opportunities. A solution that integrates the analysis throughout the entire decision-making process is essential to creating an analysis-decision-action loop to maximize the enterprise s ROE. Such a solution would guide less quantitative business users through the analysis while allowing them to contribute their own expertise and insights to the actions taken. Only then can the outcome of the business decisions be fed back to the analysts so that they can continually refine the analysis process, leading to improved, more confident decisions. Introduction Charts and graphics are integral parts of modern business reporting. The reason is easy to understand; charts give a richer view of a specific business activity, often highlighting important trends. The strength of visualizing data instead of plowing one s way through immense tables or spreadsheets has also been adopted by analysts looking for greater insight into relationships between data. Visual displays today are about both understanding data and communicating these findings. The development of charts and graphics can be divided into two groups. The first stems from the drastic improvement in software that can visually and interactively analyze large and complex sets of data. This is due to improved computing speeds combined with the ever-increasing business need to better understand and act on constantly growing volumes of business data. The resulting applications are often referred to as tools for visual interactive analytics and can be used for advanced data analyses. The other group consists of tools that visually present specific business situations and are commonly referred to as dashboards. In the 1980 s, these solutions were called EIS, Executive Information Systems. However, the EIS disappeared because the underlying technology was not flexible enough to support actual business needs. Today, the necessary technology exists and EIS has been revived, albeit under a new name. Not only has it transformed into today s dashboards; it is also frequently an integrated part of many reporting tools. What this clearly demonstrates is the constant need for visual displays of business data. Today, this demand can be met at a new level. 1
Visual Interactive Analytics 2 Due to the advantages of visualizing complex data sets in order to understand their relationships, the market for visual analytical applications is growing rapidly. The result is highly adapted solutions for performing the visual, interactive analytics that the analysts need. These applications can be as complex as the analyst can manage, while still being easy to use and understand. Figure 1 illustrates a business analysis where a number of different data dimensions are put against each other in order to understand the business. It illustrates the profitability of different insurance products over time, where each line corresponds to a region. Furthermore, each line also has a color indication in order to highlight problems. What this shows is that Civil Liability Product is doing poorly, especially in the regions North and West. In short, one single view visualizes four different data dimensions (product, region, time and problem-alert) being measured against profitability. It is important to note that data that is contributing to this performance can be singularly queried directly from the interface, interactively and visually, to determine their effect on the outcome. The marginal cost of asking any combination of questions is zero, as information is instantly accessible. In contrast, it is far too common in most organizations that additional queries can have very high costs. In such cases, many questions that the users have remain unanswered simply because asking and answering these questions requires too much time and effort. This is obviously to the detriment of the organization and should be avoided if an analytic process is to be efficient. Figure 1 Example of visual interactive analytics
Visual Interactive Dashboards Dashboards attempt to give decision-makers a complete overview of their business operations, and should allow follow-up on important business decisions without a complicated interface. This is achieved by using charts that are relatively simple compared to some of the graphical displays that are often applied in more sophisticated analytic applications. Furthermore, a key element which simplifies the interface is to using as few colors as possible and standardizing their meaning. For example, red should indicate something negative, yellow a risk, and green a positive. However, beyond the state of the dashboard today, decision-makers need to be able to ask and answer their own questions. When there is something of particular interest that the decision-maker needs to explore further, there should be the ability to get the detailed underlying data. No decision-maker will be satisfied with red and green colors; they are useful as a quick overview, but detailed information is needed to pinpoint the exact reason for a specific indicator. Just as the analyst needs to be able to work interactively with data, so does the decisionmaker. Thus, the detailed data behind a dashboard should be available in an interactive manner so that the decision-making process is not interrupted by lengthy response times or a development cycle involving the IT organization. Figure 2 shows such a visual interactive dashboard, where simple dots that are colored according to how well sales are compared to target quickly show how different regions are performing with the different products. By clicking on the red dot at the intersection of the North region and product Civil Liability, the detail at the bottom shows that the problem concerns the sales reps who are focused on developing the private customer segment. Thanks to the interactive link between the overview and the underlying data, the manager quickly recognizes a problem and its source, and the proper corrective actions can be taken. 3 Figure 2 Example of communicating important business information in a visual interactive dashboar
4 Integrating Analytics And The Dashboard Closing The Loop Whereas both visual interactive analytics and visual interactive dashboards can add enormous value to the business when used efficiently, the integration between these two related activities is often neglected. There are usually few or no business processes describing how analyses should feed decisions that are then measured and then fed back to the analysts. Dashboards alone are incapable of supporting the complexity of decision-making processes. Because analytics must be simplified to be deployed to business users, the need is to integrate these requirements into a single, seamless application accessible by all users. Only then can the user experience be truly scalable to the needs of a wide variety of skills and users. In other words, visual interactive analytics and dashboards must be integrated to provide a single tool for decision-making. This integrated solution will create a closed loop wherein the activities of the analyst are integrated with the business decisions, and where the outcome of these decisions can be fed back to inform subsequent analyses. As a result of this feedback from business activities, a positive Return on Experience (ROE) is achieved, allowing the organization to continuously improve its decision-making process by taking into account the experience from all the involved business users. It is essential that the measured results do not stay with the decision-maker who looks at the dashboard. As there is usually more than one individual involved in decision-making activities, each with varying skills, they should all be clearly integrated into the decision-making process. The overall purpose is to turn the whole organization into a more efficient and focused entity, something that is achieved by implementing a closed loop where every business activity feeds another one, whether it is an analysis or a decision. Uniformity of this decision-making process is key to productivity. Furthermore, all business users should get the maximum of guidance to automate repetitive tasks which act as barriers to participation. The purpose is two-fold. First, the business users should be able to focus on adding value, not on spending time accessing data, constructing queries, and formatting reports in order to get their business-critical information. The more that can be automated and guided, the easier his or her tasks will be. This should, of course, not imply that the user is blocked from using his or her own power of initiative when necessary. In accordance to the different user roles, the right mix of freedom and guidance is essential in order to ensure an optimal decision-making process, yielding confident business decisions. The second important aspect with guided activities, whether they are fixed processes with inherent business rules or just recommendations on how to navigate certain analytic procedures, is that they help the organization as a whole to better utilize the experience of its employees. Best practices can be put in place and shared with others. This formalized ROE is essential in order to avoid repeating bad decisions. An organization may not be blamed if it makes a mistake, but it is unforgivable if it repeats the mistake. ROE also allows the organization to better reap the benefits of good decisions, as these can be shared and further refined. Such a best-practice method should be considered a key driver to organizational success. In practice, achieving and sustaining a healthy ROE through a closed-loop decision-making process requires going beyond the traditional dashboard. Only then can all users become involved and contribute their part to the decision-making process.
The Visual Interactive Closed Loop Today, most organizations follow a well-defined process when putting in place decision support systems. The business-critical key performance indicators (KPIs) are identified, followed by some serious and time-consuming technical work such as data modeling, data extraction and query development. Once the data has been prepared, analyses and reports are distributed in one way or another. Well-defined as this may appear, it does suffer from deficiencies, the major one being its lack of interconnection where each business activity feeds another. After analyses and report distribution, there is often poor follow-up on how these reports are actually used and what basis they serve for subsequent business decisions. The result is that this well-defined process often yeilds in something akin to a black hole, where the utility of the decision support systems ends once the analyses and reports have been distributed. This situation will inevitably lead to poor decisions, and a correspondingly low ROE. Obviously, there should not be any black holes where the decision-making process abruptly terminates. In order to optimize the decisionmaking process and to make sure that it adheres to the highest quality standards, the analyses on which the decisions are based must get formalized feedback on the results of these decisions. Only then can the analyses continually improve and thereby constantly further the quality of the future business decisions. With such a closed-loop decision-making system, the quality of both the decision and the underlying analyses is measured. Figure 3 illustrates what this optimal decision-making system looks like. Also, the activities within this system should let the business users be guided to the largest possible extent in order to really formalize and facilitate their work. In a way, two masters have to be served to deliver integrated analytic capability across the organization. On the business side, all these steps will have to be communicated to a mixed audience with diverse expectations, meaning that the tool must be graphical, interactive and scalable. Only then can the tool be agile and accessible enough to answer ad hoc questions on the fly. On the technical side, a single system is required for all activities in the closedloop decision-making process: analysis, guided decision-making, dashboards and analysis refinement. At every step, it is important to remember that interactivity is a crucial part of the process. The result of such a system is the creation of a true visual, interactive closed loop for decisionmaking to support maximum ROE. GUIDED DECISION-MAKING DECIDE ANALYZE MEASURE GUIDED VISUAL INTERACTIVE ANALYTICS GUIDED VISUAL INTERACTIVE DASHBOARD Figure 3 Optimizing the decision process by using a closedloop decision-making system 5
Beyond The Dashboard Without doubt, one of the major activities for an organization to manage in order to thrive is the continuous improvement of its business processes. Every decision that is implemented will test the quality of the organization s business processes, and presents an opportunity to improve them. Consequently, every decision needs to be measured and clearly communicated so that the quality of the decision and the quality of the process behind the decision can be validated and optimized. Spotfire DecisionSite Spotfire, Inc. 212 Elm Street Somerville, MA 02144 U.S.A. Telephone +1.617.702.1600 Fax +1.617.702.1700 Toll-Free +1.800.245.4211 Spotfire AB (European Headquarters) Första Lânggatan 26 SE-413 28 Göteborg, Sweden Telephone +46.31.704.1500 Fax +46.31.704.1501 Spotfire Japan KK (Japanese Headquarters) Kinokuniya Bldg. 7F, 13-5, Hatchobon 4-chrome Chuo-Ku, Tokyo 104-0032 Japan Telephone +81.3.5540.7321 Fax +81.3.3552.3166 www.spotfire.com What is required is integration between the different phases involved in decision making. The analysts that provide the basis for many decisions must remain closely connected to the outcome these decisions. Only then can they more fully understand and refine their analyses. At the same time, the decision-makers must measure the results of their decisions, whether they are operational, tactical or strategic, to determine the quality of those decisions and improve future decisions. The best way to develop this closed loop and really optimize the decision-making process is to guide the different business users as much as possible just like it is done today for most other operational business processes such as order handling, customer service, production, etc. The outcome of these guided and interactive steps shall always feed another step in the decision-making process. By understanding and sharing the outcomes of all the activities within the decision-making process, ROE is maximized, something that is essential to avoid repeating bad decisions. The ultimate result will be a visual interactive closed loop, involving both visual interactive analytics and visual interactive dashboards, to constantly improve, in a measurable way, the decisions of the organization.