from DSSResources.com

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                          DSS News
                     D. J. Power, Editor
              September 1, 2002 -- Vol. 3, No. 18
         A Bi-Weekly Publication of DSSResources.COM

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      Check the Bayer UK case featuring Cognos Series 7
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Featured:

 * DSS Wisdom
 * Ask Dan! - Where can I find information about KPIs for building    
DSS in different industries?
 * Spreadsheet-based DSS Tip - Use Informative Headers and Footers
 * What's New at DSSResources.COM
 * DSS News Releases

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DSS Wisdom

Charles Hofer and Dan Schendel (1978) argued the assessment of 
competitive position involves identifying the key success 
factors for an industry. They note "Key success factors are 
those variables which management can influence through its decisions 
that can affect significantly the overall competitive positions of the 
various firms in an industry.  These factors usually vary from 
industry to industry (p. 77)."  Examples of key success factors include: 
market share, breadth of product lines, sales distribution 
effectiveness, relative product quality, productivity, price 
competitiveness, caliber of personnel and general image.

from Hofer, C. W. and D. Schendel, Strategy Formulation: 
Analytical Concepts, St. Paul, MN: West Publishing Co., 1978.

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Get information about Dan Power's new book, Decision Support 
Systems: Concepts and Resources for Managers, at 
http://www.dssresources.com/dssbookstore/power02.html .

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Ask Dan!
by Daniel J. Power

Where can I find information about KPIs for building DSS in different 
industries? 

The topic of identifying KPIs or Key Performance Indicators is a major 
issue in developing Executive Information Systems, Balanced Scorecard 
Systems and Performance Management Information Systems. Allan Yiin 
posted a question requesting information about KPI (key performance 
indicators) that the managers should track, especially for manufacturing 
and finance. I've also had a number of inquiries about what software is 
best for tracking KPIs. So this Ask Dan! trys to resolve some of the 
issues associated with tracking and identifying performance indicators 
and to identify web resources for finding more information.

In 1979, John Rockart identified an approach for defining 
decision-making data needs that is appropriate for many data-driven DSS 
and especially Executive Information Systems (EIS). Rockart's Critical 
Success Factors (CSF) Design Method focuses on individual managers and 
on each manager's current hard and soft information needs. A CSF 
analysis can be beneficial in identifying "the limited number of areas 
in which results, if they are satisfactory, will insure successful 
competitive performance for the organization." If organizational goals 
were to be attained, then these key areas of activity - usually three to 
six factors - would need careful and consistent attention from 
management. 

Key Performance Indicators were originally called Critical Success 
Factors (CSF) and were used in Executive Information Systems (EIS). 
These indicators of performance were rediscovered and renamed KPIs and 
MPIs (Management Performance Indicators). KPIs, CSFs or MPIs are 
strategic measures or a set of measurements used to measure strategic 
initiatives. Metrics can be expressed as ratios or absolute values. It 
is important to identify metrics appropriate to a specific company. The 
metrics should be key areas of business activity in which favorable 
results are necessary for a company to reach its goals. Establishing key 
performance metrics should start with business/organization planning. 
Managers should define appropriate goals, measures (metrics), targets, 
schedules, data collection processes, and analysis procedures.

Robert Kaplan and David Norton (1996) pioneered the Balanced Scorecard 
(BSC) approach to develop KPIs. They first introduced the idea in the 
January/February 1992 issue of the Harvard Business Review. The BSC 
focuses on financial and non-financial measures in the areas of 
financial performance, customer satisfaction, internal business 
processes, and organizational growth, learning and innovation. A 
balanced scorecard attempts to translate a company's objectives and 
strategies into tangible measures.

For a manufacturing organization one might identify performance metrics 
like: revenue per employee, average machining time, warranty claims, 
ratio of sales to inquiries, in-process inventory levels, and order 
fulfillment time. For a finance unit KPIs might focus on metrics like: 
average cash balances, revenue per employee, return on capital, total 
cost per transaction or inventory turnover.  KPIs for a university or 
college might include student turnover or "defections", articles per 
faculty member, employment rates of graduates or graduation rates by 
program.

Vodafone (2001) identified and reported on its KPIs. The KPIs included 
registered blended average revenue per user ("ARPU") based on a 12 month 
rolling average as a measure of customer activity, data revenues as a 
percentage of service revenues, EBITDA margins and operating profit 
margin.

Some of the advantages of tracking performance metrics include providing 
a continuity of knowledge in a firm, improving communications, reducing 
biases, facilitating analysis of trends, and improving planning (cf., 
Camillus, 1986).

There are a wide range of definitions and approaches for performance 
measurement. Performance management can be enhanced by a web-based 
decision support/executive information system. Some vendors with BSC 
software include SAS Institute (sas.com), Dialog Software 
(dialogsoftware.com), Executive Dashboard (iexecutivedashboard.com) and 
PM-Express(TM) (www.pm-express.com).

Also, readers may want to check the Balanced Scorecard Institute 
(http://balancedscorecard.org/) for more information. The website is a 
clearinghouse for managers to exchange information, ideas and lessons 
learned in building strategic management systems using the balanced 
scorecard approach. Kaplan and Norton operate the Balanced Scorecard 
Collaborative, Inc. and its website at http://www.bscol.com/. Also, Hopf 
et al. prepared a guide to performance management targeted to 
procurement executives that is available on the web.

References

Camillus, J. C. Strategic Planning and Management Control, Lexingtton, 
MA: Lexington Books, 1986.

CEOReview.com URL http://www.ceoreview.com/books/scorecard.htm

Hopf et al., Guide to a Balanced Scorecard: Performance Management 
Methodology, URL http://oamweb.osec.doc.gov/bsc/guide.htm

Kaplan, R. and D. Norton. The Balanced Scorecard: Translating Strategy 
Into Action. Harvard Business School Press, 1996.

Rockart, J.F. "Chief Executives Define Their Own Data Needs". Harvard 
Business Review, March/April, 1979. 

Vodafone staff, "Key performance indicators for Vodafone show ARPU 
stabilising", Press Release July 24, 2001 at URL 
http://www.vodafone.com/media/111.mc?article_id=10000156

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Spreadsheet-based DSS Tip

Use Informative Headers and Footers for Decision Support Reports

Spreadsheet-based DSS often create reports that users print. It is easy 
to forget that a decision support report created in Excel and saved as a 
PDF document or printed for distribution should provide data like who 
created it and when. To add a header click View on the menu bar and then 
click Header and Footer, click Custom Header.
In the dialog box enter informative information that helps document the 
report. You can view the headers and footers in Print Preview. 

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What's New at DSSResources.COM

08/26/2002 Posted case by Cognos Staff, "Bayer UK effectively
manages corporate performance with Cognos Series 7", Cognos, 
Inc., 2002.

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DSS News Releases - August 18 to August 30, 2002

Complete news releases can be found at DSSResources.COM.

08/29/2002 Legend announces debut launch of supercomputer. 

08/29/2002 Redundant Networks' free online tool helps companies 
assess risk of network security threat. 

08/28/2002 Information systems upgrade at Hershey Foods powers business 
transformation.

08/28/2002 Intergraph ships powerful, single-GIS-environment, 
grid data modeling and visualization technology.

08/28/2002 SAP announces employee productivity suite. 

08/28/2002 Consolidated Container selects Business Objects as business 
intelligence standard. 

08/28/2002 Teradata's data warehousing event to be World's largest. 

08/27/2002 New study from University of Michigan Business School and QAD 
verifies business value of implementing a lean supply chain. 

08/27/2002 Morris Communications selects Ascential DataStage XE to speed 
deployment of enterprise decision support solution. 

08/27/2002 Towers Perrin increases client satisfaction with Brio 
performance suite. 

08/26/2002 Intergraph’s new and improved GeoMedia WebMap 5.0 now 
available for web mapping needs.

08/26/2002 Visual communication package provides new visualization for 
FreeForm modeling system. 

08/26/2002 Haestad Methods announces Scenario Control Center(TM) for 
WaterGEMS(TM).

08/26/2002 Ballantine releases QuickGantt 4.0 project management 
software.

08/22/2002 Diebold Election Systems tallies Georgia primary results for 
2 counties in step toward statewide touch-screen elections. 

08/22/2002 CALL FOR PAPERS: IUFRO conference Vienna, April 2003, 
Decision Support for multiple purpose forestry. 

08/22/2002 New decision guide at MayoClinic.com helps women understand 
hormone replacement therapy. 

08/21/2002 Cognos delivers enterprise reporting and analysis, drives 
corporate performance management initiatives at KeyCorp. 

08/21/2002 ServiceWare Technologies, Inc. acquires InfoImage assets.  

08/20/2002 Sybase powers HIPAA compliance and data warehousing solution 
for Ochsner Health Plan.

08/20/2002 Warehouse Workbench - The first data movement and 
transformation tool for under $1,000 - is introduced by Solonde.

08/20/2002 ProClarity teams with Unisys in the "Partners in Excellence" 
program.

08/20/2002 Borders Group, Inc. chooses OutlookSoft to provide strategic 
business performance management solution.

08/20/2002 General Cable gains ROI, improved customer service by 
automating transportation management. 

08/20/2002 Siemens Power selects ClickSoftware for scheduling more than 
2,000 field service personnel worldwide.

08/19/2002 DataJungle Software extends Cognos Business Intelligence 
through Cognos Web Services. 

08/19/2002 Researchers develop easy calculator to gauge risk of heart 
attack.

DSS News is copyrighted (c) 2002 by D. J. Power. Please send your 
questions to daniel.power@dssresources.com.  

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