Page 211 -

210 Part II • Descriptive Analytics

• Visual analytics is the combination of visualiza- • The drawbacks of using financial data as the core
tion and predictive analytics. of a performance measurement system are well
• Increasing demand for visual analytics coupled known.
with fast-growing data volumes led to exponen- • Performance measures need to be derived from
tial growth in highly efficient visualization sys- the corporate and business unit strategies and
tems investment. from an analysis of the key business processes
• Dashboards provide visual displays of important required to achieve those strategies.
information that is consolidated and arranged on • Probably the best-known and most widely used
a single screen so that information can be digested performance management system is the BSC.
at a single glance and easily drilled in and further • Central to the BSC methodology is a holistic
explored. vision of a measurement system tied to the strate-
• BPM refers to the processes, methodologies, met- gic direction of the organization.
rics, and technologies used by enterprises to mea- • As a measurement methodology, BSC is designed
sure, monitor, and manage business performance. to overcome the limitations of systems that are
• BPM is an outgrowth of BI, and it incorporates many financially focused.
of its technologies, applications, and techniques. • As a strategic management methodology, BSC
• The primary difference between BI and BPM is enables an organization to align its actions with
that BPM is always strategy driven. its overall strategies.
• BPM encompasses a closed-loop set of processes • In BSC, strategy maps provide a way to formally
that link strategy to execution in order to opti- represent an organization’s strategic objectives
mize business performance. and the causal connections among them.
• The key processes in BPM are strategize, plan, • Most companies use Six Sigma as a process
monitor, act, and adjust. improvement methodology that enables them to
• Strategy answers the question “Where do we scrutinize their processes, pinpoint problems, and
want to go in the future?” apply remedies.
• Decades of research highlight the gap between • Six Sigma is a performance management method-
strategy and execution. ology aimed at reducing the number of defects in
• The gap between strategy and execution is found a business process to as close to zero DPMO as
in the broad areas of communication, alignment, possible.
focus, and resources. • Six Sigma uses DMAIC, a closed-loop business
• Operational and tactical plans address the ques- improvement model that involves the steps of
tion “How do we get to the future?” defining, measuring, analyzing, improving, and
• An organization’s strategic objectives and key controlling a process.
metrics should serve as top-down drivers for • Substantial performance benefits can be gained
the allocation of the organization’s tangible and by integrating BSC and Six Sigma.
intangible assets. • The major BPM applications include strategy
• Monitoring addresses the question of “How are management; budgeting, planning, and forecast-
we doing?” ing; financial consolidation; profitability analysis
• The overall impact of the planning and reporting and optimization; and financial, statutory, and
practices of the average company is that manage- management reporting.
ment has little time to review results from a stra- • Over the past 3 to 4 years, the biggest change in
tegic perspective, decide what should be done the BPM market has been the consolidation of
differently, and act on the revised plans. the BPM vendors.

Key terms

business report data visualization performance measurement
balanced scorecard (BSC) DMAIC systems
business performance high-performance report
management (BPM) key performance indicator (KPI) Six Sigma
dashboards learning visual analytics

M04_SHAR9209_10_PIE_C04.indd 210 1/25/14 7:34 AM