Data Integration and Data Management using Performance Management Software
The data issue is important in any comprehensive performance measurement system. Any strategic performance management software application must be fed with the relevant data. Since a strategic performance management system provides a holistic view of performance, it needs to bring together data from very different organizational units and departments.
A strategic performance management software solution should work in harmony with existing data sources to fulfill its function as a data integrator. Managers often believe that it is just a matter of connecting to the existing databases and then pulling out the data into the strategic performance management application. However, the efforts necessary to integrate and collect data from disparate sources are often underestimated. And more importantly, a lot of the performance data required is not readily available in existing databases. From my experience, on average only about 20-30% of the required data is held in existing databases.
The first step in any performance management software implementation, therefore, is to find out which information is relevant and required, whether the data already exists and, if so, where it is stored and how the data can be accessed. Most organizations have made significant investments in data warehouses, data marts and enterprise resource planning (ERP) systems, which means that a considerable portion of the required information can come directly from these back-office systems. However, as mentioned above, a significant amount of information will usually come from office applications, such as Microsoft Excel, where the data is stored in spreadsheets. Increasingly there will also be data from third-party providers that has to be fed into an application. Third-parties could provide, for example, any benchmark information, customer satisfaction information, or brand and reputation data. Many organizations also outsource their employee satisfaction surveys. A large part of the organizational performance data may have to be entered manually into the system, either because it is non-existent or because it is not stored in the available IT systems. Tapping into different data sources and creating automated feeds is not a trivial task and it is important, therefore, to ask yourself whether it is really necessary (and economical) to connect databases?
A single database for Performance Management Software
For strategic performance management, the data is usually integrated into a single database or data warehouse, and therefore the software creates a single view of “the truth”. The strategic performance management solution, however, is more than just a data repository. It should be a tool to store and share information in order to turn it into knowledge and learning. In their book Working Knowledge, Tom Davenport and Larry Prusak distinguish between data, information and knowledge. Data is just a structured record, with no meaning attached to it. Information, on the other hand, is a message that puts data into a context. It has a sender and a receiver and is meant to ‘inform’. It therefore aims to influence or change the way the receiver perceives something. Knowledge is what we make of the information. When we take on information, we blend it with our experience and values in order to turn it into actionable routines, processes, practices or norms. Strategic performance management solutions are not just a big database full of numbers. It also holds, for example, visualizations, definitions, descriptions, comments, discussion threads, and action plans. These provide the rich contextual information that allows us to make sense of the data and turn it into actionable knowledge and learning – which is the key objective of strategic performance management.