KPI's - Ushering in the year of ANALYSIS

Welcome to 2018! I have been collaborating on an opportunity to reassess the current state of technology and that has led me to declare that 2018 will be the year of ANALYSIS.  This topic came up when I was reading The Hutchins Center Explains: The framework for monetary policy this morning. The article talks extensively about the 2% target rate set by the Fed and the idea that in today's economic reality, it might be out of date and needs to be replaced by a different model, especially with the talk in economic circles about the natural rate of inflation which I believe perfectly represents, economically, the behaviors that Gen Z is driving into our culture of spending and saving. But that's another post for another day.  Evaluating the Key Performance Indicators (KPI's) and identifying when the underlying data is driving you to a different measure is a real problem beyond monetary control policies. It impacts every industry, every business function, every dashboard, human interactions. Analysis of data is woven into the fabric used to design the structure of business and entire economies. 

In reading the entire article though, it seemed as if it was all about setting the right target and what target is the right one. But there were no points targeted at understanding the tools needed to do that and about what is needed to change the underlying behaviors that are driving the controls. In other words, there were a lot of great points about what and how to change the measure, but no explanation or exploration as to whether or not the underlying process for earning (employment) and spending align to the current method of controlling monetary policy (which is what the central banks do) while governments control fiscal policy. Fiscal policy has a lot more opportunity to be politically driven and may be at odds with the current tools used to control the inflation rates. We know economists understand the impact of behavioral economics, just read this speech given by Janet Yellen in 2007 but it is not yet driving the context for discussion. And that just seems like an inefficient use of really smart economic analysts by not focusing on the whole opportunity.

The real point is that the discourse relates to challenges with my current role in driving process and system improvements for a small medical device manufacturing company.  There has been significant opportunity discovery due to many facilitated work sessions to document the company's "AS IS" and "TO BE" ERP processes. This in itself is a great advancement! However, the discussions related to the development and use of  KPI's to drive performance did not go nearly as well. Many of the identified KPI's measure results in a process being performed outside of the desired process or functional area because we are still defining our functional process models and aligning them appropriately. However, this identified a great opportunity to drive data and analytics on the processes that they have defined into their hands so that they can see for themselves  that there is a real need for the business managers to modify the execution behaviors driving the processes and results before we can really define KPI's that will support scaling to the next level.

The model here simply shows a deployment model for KPI's that can be explored later, but want to point out that it requires KPI's to be examined for complexity and sources. This really understates the analysis that occurs. This is a great topic to visit in 2018 as IT begins to use the tools to deliver data-based solutions to our business partners.

I challenge you to identify at least one area in 2018 that can be transformed by defining the data and analyzing it to define differentiating KPI's that help your business in ways that 2017 seemed impossible!  Welcome to 2018!!!