KPI: Leveraging corporate data with key performance indicators
Today's information management systems put a plethora of corporate data at managers' fingertips, but sometimes the information is too scattered to allow for an easy overview. In addition, the temptation can be strong to measure everything without considering carefully what factors are most relevant. Wise selection of key performance indicators (KPIs) and the use of a good software solution can help address both problems.
Rebates are the rewards everyone loves to hate. Getting money back is nice, but the process is a headache for all concerned. Customers get frustrated with the long delays for rebates, and retailers incur significant administrative expenses. 360incentives is a SaaS-based incentives platform that enables manufacturers and distributors to deploy, measure and validate their sales incentives and promotional programs in real time.
"We provide online enrollment, real-time access to tracking and a toll-free number that is answered live," says Jason Atkins, CEO of 360incentives. "We want to complete the transaction with a minimum of inconvenience and improve the satisfaction of everyone involved."
To measure its success in meeting its objectives, 360incentives selected SimpleKPI, a Web-based software product designed to pull performance data from any source and present it in a visual format. "We have information in accounting systems, our call center, customer satisfaction databases and many more," says Atkins. "In some cases, we also enter data manually. SimpleKPI was one of the few products that provided the wide range of options that we needed."
360incentives ties its KPIs to its strategic goals. "If we focus on a corporate goal such as doing more with less," continues Atkins, "we want to track related issues-whether we are processing more claims without adding people, or designing our platform so that people do not need to use the call center." Examples of KPIs used by 360incentives include financial targets, customer happiness and the net promoter score, a measure of customer loyalty.
The KPIs are viewed daily and discussed weekly at executive meetings. "When we see a spike in a metric, we find out why it is occurring, and then take appropriate action." In one case, calls were spiking higher than usual," Atkins recalls. "We drilled down and found they were coming in a certain time of day. It turned out that our call center team did not have some time-sensitive information and people were calling back. Once we provided the information in a proactive way to the agents, the repeat calls subsided."
Promotions are often a high-profile activity for companies, so having them run smoothly is important. "In this age of social media, if people get upset about something a company does, they can easily tell everyone in a very public way," Atkins says. "Companies spend billions of dollars getting people to buy their product. The last thing they need is for someone to damage their brand."
As its name suggests, SimpleKPI software was designed to be easy to use. "We found that small and medium-sized businesses were desperate for performance data," says Stuart Kinsey, product director for SimpleKPI. "They wanted to be able to create their own reports, visualize the data through dashboards and access the full functionality of the system."
Most companies have identified their KPIs prior to launching SimpleKPI, according to Kinsey, who adds, "Sometimes they are already tracking them, but doing it inefficiently through spreadsheets." If a company does not know what it should be tracking, SimpleKPI staff provide guidance. "Some companies are collecting data at too granular a level, such as measuring detailed manufacturing processes rather than production or units sold," he explains, "and others do not have enough measures to provide insights into performance."
Examples of good measures include the percent of visitors to an e-commerce site who opt to try out a software product or geographic distribution of customers in relation to revenues. Once the right mix of KPIs is selected, the company can look at trends and make data-driven decisions.
Driving in style
You might think that a limousine is just a fancy way to get from one place to another, but Bijan Zoughi sees it differently. After working part-time as a chauffeur while in college, Zoughi realized that corporate clients and celebrities wanted the same qualities in transportation as they did from their attorneys and other professionals—top-level service, reliability and consistency.
That insight proved to be a vital part of Zoughi's recipe for success. Diva Limousine Ltd., which he founded over 25 years ago, and now operates in more than 350 cities worldwide through a network of affiliates and two flagship corporate-owned locations in Los Angeles and New York. However, as the company grew over the years, existing methods of measuring performance were not keeping up.
"At first, I could look at the balance sheet every quarter and know what was going on," says Zoughi. "But the business environment became more complex. We had acquired a large fleet and were working with numerous affiliates. We were also contending with dramatic fluctuations in gas prices, and had more information available, such as GPS data. We needed a better way to make sense of it all."
Diva Limousine selected Birst to bring that data together into a set of KPIs. The company uses an SQL database for reservations, another system for accounts payable and ShoreTel (shoretel.com) for its call center, as well as other systems. Each one had important information to provide. "We started at the top level with our KPIs, such as average ticket prices and factors that contribute to costs, like the price of gas," Zoughi says. "We will be releasing more data into the system layer by layer, including accounts receivable, cost per trip and other metrics." Initially, only top-level managers used Birst to access the KPIs, but usage is being expanded and will soon reach the departmental managers.
Changing business needs
In 2011, Diva Limousine began using mobile devices, pushing reservations to chauffeurs and providing real-time information to customers. That additional data will allow the company to monitor not only other indicators of performance, but also a means to streamline and automate how information specifically related to the service is disseminated to both their employees and customers. "In the past, we relied on assumptions to make our decisions," says Zoughi. "Some may have been correct, and others were wrong. Businesses that don't price their services correctly do not make it in today's world. Now we are in a position to make decisions based on data. It's like turning a light on."
Birst was founded on the premise that automating the production of business-ready data could cut the costs of building a KPI solution by 75 percent. "You can't bring low-level code to the cloud," says Brad Peters, CEO of Birst. "We spent a lot of time and energy creating a holistic process from data warehousing and data management." Birst connects to raw sources, creates high-level rules and develops the schema. "We found that there was a lot of repetition in analytical models," Peters points out.
One of the biggest risks in monitoring KPIs is allowing the process to expand too much, according to Peters. "Companies think they need to do everything, so they end up with a project that can't be finished," he says. Birst's subscription model allows companies to change their analyses easily. "KPIs change as business needs change," Peters adds. "and it should be easy to make modifications. We designed Birst to be agile and to allow that flexibility."
RealPlayer, established in 1995, produces software of the same name that delivers audio, video and photos in dozens of formats, provides media streaming and allows conversion from one file format to another. Available as a free download and in a premium version, RealPlayer's software also supports mobile devices, having released software for the Android operating system in August 2012.
With millions of downloads of its software, the company decided to start better utilizing the data it was collecting about product use. "We use MySQL as our database, and our managers can query it," says David Smith, director of analytics at RealPlayer, "but we wanted to push the relevant metrics out to our employees." In addition, RealPlayer was using BigQuery from Google, and wanted to integrate the output from the two sources.
RealPlayer considered building out its in-house tool to produce the metrics or going to an enterprise business intelligence solution. In the course of its search, however, RealPlayer came across Metric Insights, which offers its Push Intelligence platform that combines a patented KPI warehouse with collaboration and notification features. Users know when key business metrics have changed, and why. "This product had the functionality we wanted," Smith says, "and its price was very competitive."