Performance Management - Survey: October 2007

Performance Management - Survey
October 2007
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Performance Management - Survey
By Luc Lutin, Steven De Hertogh and Prof Dr Stijn Viaene
Vlerick Leuven Gent Management School
Operations & Technology Management Centre
Vlamingenstraat 83 3000 Leuven Belgium
www.vlerick.com
Table of Contents
Table of Contents 3
1 Executive summary 4
2 Research methodology 6
3 Respondent profles 6
4 Context for Performance Management 8
4.1 Performance Management defned 8
4.2 Performance Management systems 8
4.3 Business Intelligence 9
4.4 Better Management 9
5 Performance Management survey results 11
5.1 Satisfaction with Performance Management eforts 11
5.2 Top fve challenges to Performance Management 12
5.2.1 Management sponsorship matters 12
5.2.2 Performance Management information as a corporate asset 12
5.3 BI technologies used for Performance Management 13
5.3.1 Performance Management solution priorities 13
5.3.2 BI technology toolset 13
5.3.3 BI technology vendors 14
5.4 Operationalising BI 16
5.5 Performance Management Competency Centers 16
6 Appendix: Overview of survey questions 17
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1 Executive summary
Performance Management remains a hot topic for many organisations. Some 88% of the survey respondents afrm the position
of Performance Management on their organisations radar screens.
Tis report digs into trends observed in the Performance Management arena. Te fndings stem from a survey conducted in
August September 2007 for Belgium and Luxemburg. Te 609 survey respondents represent a good cross-section of the
Performance Management market. Respondents come from a variety of sectors and represent a broad range of diferent positions
in organisations. Noteworthy is the spread between business and IT respondent profles. 44.2% of the respondents see themselves
as business specialists, 45.1% as a combination of business and IT, and 10.7% as IT only.
Performance Management covers the combination of management, methodologies and metrics and is supported by applications,
tools and infrastructure enabling users to defne, monitor, and optimise results and outcomes to achieve personal or departmental
objectives, while aligning with strategic objectives across multiple organisational levels (Gartner). Tis defnition was used at the
outset of the survey.
Better Management. Te ultimate aim of Performance Management is to improve
decision-making at all levels of the organisation. Six requirements are put forth to
optimally deploy Performance Management in contemporary organisations: (1) defne
key performance indicators, (2) balance the metrics, (3) deliver actionable information at
the right time, (4) establish horizontally integrated enterprise management, (5) establish
vertically integrated enterprise management, and (6) enable closed loop management.
Satisfaction. Respondents are not overwhelmingly satisfed with previous Performance
Management initiatives. For example, on their eforts to integrate business processes,
many respondents (54%) indicate that satisfaction is either unknown to them or below
expectations. Overall, senior executives and managers are more satisfed than individual
contributors. Interestingly, the number of dont know responses seriously increases
when going down the organisational ladder.
Top fve challenges. Out of 16 diferent challenges to Performance Management
success that were presented to the survey respondents, the following top fve emerged:
(1) management sponsorship, (2) culture change, (3) business rules analysis, (4) data
quality and (5) return on investment justifcation. Arguably, none of these challenges are
purely technological.
Executive support for Performance Management includes the CEO in a third of the
cases and the CFO in a forth. COOs and CIOs are also found at the helm, be it to a lesser
extent.
Is Performance Management information valued as a corporate asset? About one third of the survey respondents feel that both
the IT as well as the business side undervalue Performance Management information as an asset to the enterprise. Te demand
for ROI justifcation of Performance Management initiatives is in line with the mixed satisfaction reported for past initiatives.
Application areas. Despite Performance Managements pervasive, enterprise-wide
ambitions, solution priorities in most cases remain confned to strategic and fnancial
management. Other potential application domains such as Sales intelligence, HR value
management and IT value management are still lagging behind.
Performance Management
basically comes down to
better management.
Satisfaction with
Performance Management:
mixed evidence
Management
sponsorship matters.
Justifying ROI is up
in the charts.
Strategic and fnancial
management solutions
remain the top priorities.
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Business Intelligence (BI) technology toolset. Te BI technology toolset for
Performance Management is vast. It comprises data warehousing, querying and reporting
as well as more advanced analytical tooling. Te use of scorecards and dashboards remains
popular. Most of the respondents expect to see even more of them deployed in support
of Performance Management in the upcoming years. Moreover, BI tools are expected
to tackle ever more complex analytical tasks and to become increasingly supportive of
collaborative work and workfow.
BI technology vendors. For most organisations, the number of BI technology vendors
currently supporting their Performance Management eforts, is confned to at most
three. Tis situation is not expected to change much within two years.
Polled for their preferred vendor selection strategies, some 37% of the respondents
express their preference for a multiple best-of-class BI vendor constellation. A further 20%
opt for a single BI focused vendor selection strategy. Some 17% of the respondents claim
to aim for their enterprise application supplier as the preferred BI technology provider.
Newsworthy is that some 50% of the respondents would like their BI technology vendors
to become more knowledgeable about their organisations business issues.
Operationalising BI. Currently, Performance Management applications are most
widely used by senior managers (82.7%), middle managers (79.2%) and C-level executives
(61.6%). Beyond this, the spread of their use is more limited. For example, Performance
Management application usage by frontline personnel is confrmed by some 33% of the
respondents. Still, the use of these applications is expected to spread ever more widely in
the organisation in the coming years, not least at the more operational levels. Tis trend
underlines the enterprise-wide ambitions for Performance Management.
Performance Management Competency Centers. Finally, a vast majority of the
respondents (81.6%) seem to believe in the catalyst power of a dedicated cross-functional
team with specifc tasks, roles, responsibilities and processes for supporting and
promoting the efectiveness of Performance Management in the organisation.
BI moves into the realm of
collaborative work.
BI vendors need to
become more versed
in their customers
business issues.
Performance
Management is further
operationalised.
Te emergence of specialised
Competency Centers as a
catalyst for success
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2 Research methodology
Focus. Tis report is designed for business as well as IT people interested in Performance Management.
Methodology. Te research for this report is based on a survey conducted by Vlerick Leuven Gent Management School in August/
September 2007. Tis research was sponsored by Cognos. A questionnaire of 20 questions (see Appendix) was set up to survey
Business and IT professionals drawn from the Cognos Belux database. Te primary purpose of this report was to stimulate the
expert debate at the Cognos Performance 2007 event in Brussels on 16 October 2007.
A total of 10,786 contacts were invited to complete the online survey. Te survey received 791 responses, of which 693 were
considered valid, giving rise to a response rate of 6.4%.
A frst question in the survey established whether respondents
organisations had Performance Management on their radar
screens (see Figure 1). Some 88% of the survey respondents afrm
the position of Performance Management in their organisations.
Respondents showing no interest in Performance Management
were excluded for the remaining analyses of this survey, leaving a
total of 607 usable responses.
3 Respondent profles
Most of the survey respondents (51.3%) work for a private com-
pany. About one third is employed in a public company. Some 5%
work for a consultant or a software/tool vendor (see Figure 2). Te
latter where asked to complete the survey from the perspective of
one of their customers. A breakdown of the respondents in terms of
company turnover (private companies only) is provided in Table 1.

Table 1: Respondent company turnover 1

Performance Management on the organisation s radar
53,4%
22,2%
12,0%
12,4%
We have been investing in Performance Management for some time now
We recently started to invest in Performance Management
We are planning to invest in Performance Management
We are not interested in Performance Management
N = 693 1
2
Type of organisation
3,6%
1,5%
33,6%
61,3%
a private company a public company
a consultant a software or tool vendor
N = 607
1N = 320, private companies only
Turnover
$
%
> 1 billion 41,6%
751 million 1 billion 8,4%
501 million 750 million 10,3%
251 million - 500 million 6,6%
< 50 million 19,4%
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In terms of numbers of respondents, the following sectors are best
represented in the survey: Industry & Manufacturing (15.2%),
Chemical & Pharmaceutical (13.8%), Distribution, Retail &
Wholesale (12.7%), Government (11.7%), and the Financial
Services (i.e. Finance, Banking and Insurance) (9.2%)
(see Figure 3).
Most respondents belong to the felds of Information Systems &
Technology (31.1%), Finance (21.4%), Strategy (14.7%), and
Operations (8.7%) (see Figure 4).
Asked for their profles as IS/IT, business or a combination of
both, only 10.7% of the respondents consider themselves as pure
IS/IT (see Figure 5). Some 44.2% of the respondents categorise
themselves as business, whereas the remaining 45.2% like to be
profled as a combination of business and IS/IT.
About half of the respondents occupy senior leadership/executive
or senior manager positions (49.0%) (see Figure 6). Some 35%
belong to middle management. Te remaining respondents include
supervisors (5.3%), responsible for a team of subordinates, and
individual contributors (8.1%).
3
Industry sector
5,0
1,2
2,5
2,5
2,6
2,6
3,1
3,6
4,4
5,3
6,4
7,4
11,7
12,7
13,8
15,2
0 2 4 6 8 10 12 14 16
% of respondents
Industry & Manufacturing
Chemical & Pharmaceutical
Distribution, Retail & Wholesale
Government
ICT
Energy & Utilities
Automotive
Food & Beverages
Finance
Insurance
Consulting
Health Care
Banking
Human Resources
Media
Other
N = 607
4
Functional domain
4,8
1,5
2,1
2,1
2,5
3,5
3,6
4,0
8,7
14,7
21,4
31,1
0 5 10 15 20 25 30 35
% of respondents
Information Systems & Technology
Finance
Strategy
Operations
Human Resources
Sales
Marketing
Product & Service development
Customer Service
Risk & Compliance
Procurement
Other
N = 607
5
Prole: Business, IS/IT or a combination of both
10,7%
44,2%
45,1%
an IS/IT specialist a business specialist a combination of both
N = 607
6
Position in the organisation
24,1%
24,9%
34,1%
5,3%
8,1%
3,6%
Senior Leadership/Executive Senior Manager
Middle Manager Supervisor
Individual Contributor Other
N = 607
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4 Context for Performance Management
4.1 Performance Management
Te following defnition is used for Performance Management:
Tis defnition refers to a shift in scope from just registering the corporate results for accounting purposes to efectively managing
a rich and balanced set of organisational performance aspects, ultimately helping to establish the enterprises strategic identity.
Information technology does not dominate this defnition. Rather, IT is mentioned on par with, or better, as an enabler of adapted
management methodologies and models, the adoption of performance measurement techniques, and integrated business process
management
2
.
4.2 Performance Management systems
Performance Management systems serve fve diferent roles: 3
1. Measure performance
Tis category encompasses the role of monitor progress and measure performance/evaluate performance.
2. Strategy management
Tis category comprises the roles of planning, strategy formulation, strategy implementation/execution, and focus
attention/provide alignment.
3. Communication
Tis category comprises the roles of internal and external communication, benchmarking and compliance with
regulations.
4. Infuence behaviour
Tis category encompasses the roles of rewarding or compensating behaviour, managing relationships and control.
5. Learning and improvement
Tis category comprises the roles of feedback, double-loop learning and performance improvement.
Performance Management covers

the combination of management, methodologies and metrics,
supported by applications, tools and infrastructure
enabling users to defne, monitor and optimize results and outcomes to achieve personal or departmental objectives, while
aligning with strategic objectives across multiple organisational levels. (Source: Gartner)
2 S. Viaene and J. Willems, Corporate Performance Management: beyond dashboards and scorecards, Journal of Performance
Management, Vol. 20, Issue 1, 2007, pp 13-32.
3 M. Franco-Santos, M. Kennerley, P. Micheli, V. Martinez, S. Mason, B. Marr, D. Gray and A. Neely, Towards a defnition of a
business performance measurement system, International Journal of Operations & Production Management, Vol. 27, Issue 8,
2007, pp. 784 801.
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When conceiving of a Performance Management system, it is recommended to frst specify what specifc goals it serves, and, more
importantly, how these can be attained.
Performance Management systems may comprise a multitude of processes. Arguably, the most vital of these are the following: 3
1. Selection and design of measures
Tis category comprises the processes of identifying stakeholders needs and wants, planning, strategic objectives
specifcation, measures design and selection and target setting.
2. Collection and manipulation of data
Tis category includes the processes of data capture and data analysis.

3. Information management
Tis category encompasses the processes of information provision, interpretation and decision making.
Te efectiveness of Performance Management systems is further enhanced with the inclusion of a process for evaluating
performance and linking it to rewards, and a process for system review (feedback).
4.3 Business Intelligence
Te following defnition is used for Business Intelligence (BI):
Analysts frequently make reference to Business IntelligencePerformance Management. In many places where we might have
expected Performance Management, we simply hear BI, or vice versa. Te association between BI and Performance Management
is obvious from both defnitions: BI refers to the application, tool and infrastructure support for Performance Management.
4.4 Better Management
Performance Management clearly raises the bar for organisational management. It aims to improve decision making at all
organisational levels. Tese are some of the primary expectations set for Performance Management: 2
1. Te use of metrics.
You cannot manage what you cannot measure.
Defning the key performance indicators is a crucial step in transforming the strategy into clear executable objectives
Decent key performance indicators meet the SMART requirements: Specifc, Measurable, Achievable, Relevant and Time
framed.
2. Te use of a balanced set of metrics.
Te call for balancing a variety of performance perspectives, fundamental to such frameworks as the Balanced
Scorecard 4 5 and the Excellence Model of the European Foundation for Quality Management, emerged in answer to the
old-fashioned and overly narrow focus on fnancial and accounting metrics for assessing and benchmarking organisational
performance. It is a call for balancing short term and long term objectives, identifed objectives and their underlying
drivers, and hard, objective metrics and softer, more subjective ones.
Business Intelligence refers to a broad category of applications and technologies that are used to gather, store, provide
access to, and analyse data and information about company operations and its environment to support enterprise users
decision-making processes.
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3. Te right time delivery of actionable management information.
Tere is a fundamental need for up-to-date management information in order to be able to compete within operating
paradigms fraught with continuous environmental change. In view of the massively available potentially interesting
information foating around, highly efcient and efective fltering mechanisms are essential for supporting contemporary
enterprise management.
4. Horizontally integrated enterprise management.
Aligning the value creating steps throughout the core enterprise processes, with a relentless focus on the customer
what is nowadays referred to as business process management remains a fundamental organisational challenge.
Organisational structures based on grouping functional competences, still a fundamental basis of most contemporary
enterprises, have a history of inducing silo management.
5. Vertically integrated enterprise management.
From a strategic management perspective this requires a clear articulation of the strategic objectives and underlying
hypotheses. But this is just the start. In order to be able to execute the chosen strategy the objectives and hypotheses
need to be mapped onto the tactical and operational levels to align them.
6. Closed loop management.
Management, essentially, is about (re-)planning, organising for execution, and control. Te objective is to come and
remain in control of the execution. Faced with constant, fast-paced change in the environment, mature management
ought to be characterised by a capability for fast incremental learning as it continuously iterates through phases
of planning, organisation/execution and control. Tis is valid for management at the strategic level as well as for
management at the tactical and operational levels.
4
S. Kaplan and D. Norton, Te strategy-focused organisation: How balanced scorecard companies thrive in the new business environment,
Harvard Business School Press, 2000, 416 p.
5
S. Kaplan and D. Norton, Strategy maps: Converting intangible assets to tangible outcomes, Harvard Business School Press, 2004, 324p.
6
European Foundation for Quality Management, Introducing Excellence, 2003, www.efqm.org.
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5 Performance Management survey results
5.1 Satisfaction with Performance Management efforts
Te level of satisfaction with Performance Management eforts is assessed with respect to the following six better management
expectations for the organisation (see Section 4.4):
1. It enables management on the basis of evidence.
2. It facilitates management of a comprehensive set of performance indicators.
3. It supports the integration of business processes
4. It provides the necessary agility in steering the organisation.
5. It enables the alignment between strategy formulation and execution.
6. It helps to establish a learning organisation.
Respondents are not overwhelmingly satisfed with previous
Performance Management initiatives (see Figure 7). Overall, the
expectations for management on the basis of evidence, the use of
more balanced sets of performance indicators, and the alignment
of strategy formulation with execution seem to be met by at least
a majority of the respondents. However, less than 50% of the
respondents claim to be successful on the other dimensions.
Satisfaction was then split out per respondent profle (see Figures 8,
9, and 10). Senior executives and senior managers seem to be more
satisfed than individual contributors. Still, overall, a considerable
number of respondents remain unable to assess the success of past
Performance Management initiatives. Interestingly, the number of
dont know responses seriously increases when going down the
organisational ladder.
7
Satisfaction with Performance Management eorts
17,5 34,0 42,6 5,9
15,8 26,3 51,7 6,2
16,0 33,0 45,0 6,0
15,5 38,5 40,3 5,7
9,1 21,2 60,9 8,8
17,6 16,2 60,1 6,1
0% 20% 40% 60% 80% 100%
% of respondents
Management on the basis of evidence
Management of a comprehensive set of
performance indicators
Integration of business processes
Agility in steering the organisation
Alignment of strategy formulation and
execution
Learning Organisation
Don't know Below Expectations
Meets Expectations Exceeds Expectations
N = 524
8
10,2 40,6 42,5 6,8
8,3 27,4 56,8 7,5
9,0 35,3 47,7 7,9
7,5 43,2 44,0 5,3
3,4 27,8 61,7 7,1
11,7 16,2 67,7 4,5
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
% of respondents
execution
N = 266
- Senior Executives and Senior Management
9
21,2 28,8 45,3 4,7
22,4 26,5 45,9 5,3
19,4 32,9 44,7
20,6 35,9 37,6
11,2 14,1 62,4 12,4
19,4 17,6 54,7 8,2
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
% of respondents
execution
N = 170
- Middle Managers
5,9
2,9
10
34,8 21,7 36,2 7,2
30,4 18,8 46,4 4,3
34,8 24,6 34,8 5,8
31,9 29,0 34,8 4,3
9,1 21,0 61,0 8,9
33,3 10,1 47,8 8,7
0% 20% 40% 60% 80% 100%
% of respondents
execution
N = 69
- Supervisors and Individual Contributors
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5.2 Top fve challenges to Performance Management
Out of 16 diferent challenges to Performance Management success that were presented to the survey respondents (see Appendix),
the following top fve emerged:
1. Management sponsorship
2. Culture change
3. Business rules analysis
4. Data quality
5. ROI justifcation
All respondents were asked for their top fve ranking. Te overall
ranking of challenges was obtained by summing the rankings of all
individual respondents for each ranked item. Te relative importance
for the top fve resulting items was obtained by comparing the total
item rank of each item with the rank of Management Sponsorship
as the leading challenge (see Figure 11).
5.2.1 Management sponsorship matters
Who drives Performance Management at the top of organisations?
Respondents were allowed to tick more than one profle. In about
34% of the cases the CEO is on board (see Figure 12). Te CFO
is part of the main drivers of Performance Management in some
25% of the cases. In about 17% of the cases, the COO joins at the
helm. In some 15% of the cases, the CIO is providing management
sponsorship. Chief Performance Ofcers have not entered the arena
yet according to the surveys results.
5.2.2 Performance Management information as a corporate asset
Still about one third of the survey respondents feel that both
the IT as well as the business side undervalue Performance
Management information as an asset to the enterprise (see Figure
13). Somewhat over 50% of the respondents are satisfed with how
their organisations business and IT side value it. Interestingly,
some small percentage of the respondents believe that Performance
Management information is excessively valued as an enterprise
asset, both at the business as well as the IT side.
11
1,00
0,95
0,89
0,87
0,83
0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
1
ROI
justication
Data quality Business
rules
analysis
Culture
change
Management
sponsorship
N = 607
Top ve most important challenges
to Performance Management
R
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a
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e

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12
Executives driving Performance Management eorts
34,4%
25,3%
17,1%
14,6%
4,1%
4,5%
CEO (Chief Executive Ocer) CFO (Chief Financial Ocer)
COO (Chief Operating Ocer) CIO (Chief Information Ocer)
CPO (Chief Performance Ocer) Other
N = 607
13
Performance Management information
valued as a corporate asset?
8,2
5,8
53,9
54,4
32,1
32,8
5,8
7,1
0 10 20 30 40 50 60
% of respondents
Don't know
Too little
Enough
Excessive
at the Business side at the IT side
N = 607
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5.3 BI technologies used for Performance Management
5.3.1 Performance Management solution priorities
Te survey respondents were asked to fag their solution priorities
for Performance Management. Two of them really stand out:
Strategic Management solutions and Financial Management
solutions. More than 70% of the respondents ticked them of in
the list. Sales intelligence solutions are a distant third with some
39% of the respondents having it on their priority list. HR value
management and IT value management solutions complete the top
fve.
5.3.2 BI technology toolset
14
Performance Management solution priorities
2,0
15,7
16,6
18,5
19,1
25,4
28,7
29,8
33,3
39,4
70,2
72,8
0 10 20 30 40 70 80
% of respondents
Strategic management
Financial management
Sales intelligence
HR value management
IT value management
Customer intelligence
Supply Chain intelligence
Risk management
Innovation management
Services management
Procurement
Other
N = 607
50 60
15
BI technologies currently used
for Performance Management
33,7 49,5 16,8
41,0 33,6 25,4
44,9 41,7 13,4
69,6 25,7 4,7
73,1 19,6 7,3
76,6 16,8
6,6
91,0 6,6
2,4
0 20 40 60 80 100
% of respondents
Standard reporting
tools
End-user query and
reporting tools
Data integration and
data warehousing
Dashboards/Scorecards
tools
Workow and
collaboration
OLAP tools
Advanced analytics &
data mining tools
Yes No Don't know
N = 607
16
Evolution of importance of BI technologies for
Performance Management within 2 years
21,9 55,7 19,9
3,8 30,0 31,5 34,7
0,7 24,1 57,3 17,9
2,0 22,2 67,9
1,3 24,9 66,6
7,4 37,4 49,3
10,2 52,1 33,6
0 20 40 60 80 100
% of respondents
Standard reporting
tools
End-user query and
reporting tools
Data integration and
data warehousing
Dashboards/Scorecards
tools
Workow and
collaboration
OLAP tools
Advanced analytics &
data mining tools
Lose in importance Remain stable
Gain in importance Don't know
N = 607
8,1
7,2
5,9
4,1
2,5
***
STANDARD REPORTING TOOLS
***
Tese tools are used by professional developers to create
standard reports for groups, departments, or the enterprise.
***
END-USER QUERY AND REPORTING TOOLS
***
Tese tools are used by end-users to create reports for
themselves or others; requires no programming.
***
DATA INTEGRATION AND DATA WAREHOUSING TOOLS
***
Tese tools are used to construct and maintain an integrated
data household on top of which monitoring, analysis
and reporting applications run.
***
DASHBOARD/SCORECARD TOOLS
***
Tese tools allow end-users to view critical performance data at a
glance seeing graphical icons and drill down to analyze
detailed data and reports if desired.
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Te BI technology toolset for Performance Management
is vast (see Sidebar). Of old, BI gets associated with
data warehousing, querying and reporting and
other analytical tools. Te top three of most used BI
technologies in support of Performance Management
comprises the following: standard reporting tools
(91.0%), end-user query and reporting tools (76.6%)
and data integration and data warehousing (73.1%)
(see Figure 15).
Te use of scorecards and dashboards remains popular.
Scorecards and dashboards are aimed at capturing
the most critical performance information at a single
glance. Tese visually appealing user interfaces are
now almost naturally associated with automated
support for monitoring Performance Management
information. Moreover, most of the respondents
(67.9%) expect to see even more of them deployed in
support of Performance Management in the upcoming
two years (see Figure 16).
Noteworthy is that BI tools are expected to tackle
ever more complex analytical tasks, including support
for data mining. Still, currently, almost half of the respondents (49.5%) stay of advanced analytics and data mining in their
support for Performance Management. Another interesting trend is that BI tools are expected to become increasingly supportive
of collaborative work and workfow.
5.3.3 BI technology vendors
Te number of BI technology vendors currently in use to support
Performance Management for most organisations is confned to at
most three (see Figure 17). Overall, this situation is not expected to
change much within two years.
Note, however, that some 18% of the survey respondents are
unaware of the number of supporting BI technology vendors. Tis
number increases to almost 30% when asked for a forecast within
two years time.
Te relationship between the turnover of the for-proft respondents
in the survey and the number of BI technology vendors used in
support of Performance Management now and within two years is
depicted in Table 2. Cells with shaded backgrounds represent the
modal classes for each of the turnover categories.
***
WORKFLOW AND COLLABORATION TOOLS
***
Tese tools enable users to both share and discuss
information and collaborate in the context of a
business process or activity.
***
OLAP TOOLS
***
Te online analytical processing tools allow end-users to
slice and dice data dimensionally to explore data
from diferent perspectives.
***
ADVANCED ANALYTICS AND DATA MINING TOOLS
***
Tese tools allow business analysts to create data
driven descriptive or predictive models of business activity.
17
Number of BI technology vendors used
to support Performance Management
2,5
2,4
8,4
10,3
57,3
45,7
28,1
33,2
3,7
8,5
0 10 20 30 40 50 60
% of respondents
None
1 vendor
2 to 3 vendors
4 to 7 vendors
8 or more vendors
Within 2 years Now Now: N = 497
Within 2 years: N = 438
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Table 2: Turnover versus Number of BI technology vendors7
Turnover
$
Number of vendors now (within two years)
None 1 2 3 4 7 >7 Total
> 1 billion 7,3%
(4,2%)
26,4%
(26,3%)
48,2%
(60,0%)
16,4%
(6,3%)
1,8%
(3,2%)
100,0%
100,0%
101 million 1 billion 8,0%
(1,2%)
26,1%
(27,2%)
60,2%
(56,8%)
2,3%
(11,1%)
3,4%
(3,7%)
100,0%
100,0%
< 100 million 14,3%
(5,5%)
49,2% 31,7% 4,8%
(10,9%)
0,0%
(0,0%)
100,0%
100,0%
(25,5%) (58,2%)
Next, respondents were polled for their organisations preferred BI
technology vendor selection strategy (see Figure 18). Some 37%
of the respondents express their preference for a multiple best-
of-class BI vendor constellation. A further 20% opt for a single BI
focused vendor selection strategy. 16.8% of the respondents claim
to aim for their enterprise application supplier as the preferred BI
technology provider. 17.0% report to have no preference.
Interestingly, about half of the respondents in the survey would
want their BI technology vendors to become more knowledgeable
of their organisations business issues (see Figure 19).
18
Preferred BI technology vendor selection strategy
17,0
2,5
6,1
16,8
20,4
37,2
0 5 10 15 20 25 30 35 40
% of respondents
Multiple best-of-class BI vendors
Single BI-focused vendor
Same vendor as Enterprise Application
Same vendor as Infrastructure
Same vendor as Enterprise Application
and Infrastructure
No Preference
N = 607
7now: N = 261; private companies only / within 2 years: N = 231; private companies only
19
BI technology vendors:
beyond just being a technology vendor?
47,9%
27,8%
24,2%
Yes No Don't know
N = 607
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5.4 Operationalising BI

Currently, Performance Management applications are reported to be most widely used by senior managers (82.7%), middle
managers (79.2%) and C-level executives (61.6%) (see Figure 20). Beyond this, the spread of their use is more limited. Front-line
personnel is currently least exposed to Performance Management applications, with a reported use at this level by only 32.8% of
the respondents.
How is the number of users going to evolve within the next two years? Te expectation that comes out of the survey is for the users
of Performance Management applications to increase and spread ever more widely in the organisation, not least at the operational
levels (see Figure 21). Tis is in line with analysts expectations who for some time now have been forecasting an exponential
increase of the BI usage for optimising business operations. Te surveys fndings underline these pervasive, enterprise-wide
ambitions for Performance Management: BI is operationalising.
5.5 Performance Management Competency Centers
Te idea of establishing a dedicated Competency Center for
Performance Management, that is, a cross-functional team with
specifc tasks, roles, responsibilities and processes for supporting
and promoting the efectiveness of Performance Management,
seems appealing to a vast majority of the survey respondents
(81.6%) (see Figure 22). 22.9% are strong supporters, 40.4% think
of it as a valuable notion, and 18.3% assume at least some benefts
may result. Only some 6% of the respondents seem to be opposed
to the idea. Of course, the setup of such a team may take on many
diferent forms.

21
Users of Performance Management
applications within 2 years
2,6 32,3 46,6 18,5
2,3 31,1 52,6 14,0
1,0 31,6 59,1 8,3
0,5 40,0 53,0 6,5
0,7 42,0 38,7 18,6
1,3 49,1 34,4
15,2
0 20 40 60 80 100
% of respondents
Members of the
Board of Directors
C-level executives
Senior managers
Middle managers
Supervisor
Frontline personnel
Decrease Remain Stable Increase Don't know
N = 607
20
Users of Performance Management applications today
52,9 32,8 14,3
35,6 51,6 12,8
13,7 79,2 7,1
11,0 82,7 6,3
18,3 61,6 20,1
27,3 56,7 16,0
0 20 40 60 80 100
% of respondents
Members of the
Board of Directors
C-level executives
Senior managers
Middle managers
Supervisor
Frontline personnel
No Yes Don't know
N = 607
22
Performance Management Competency Centers as catalysts?
22,9%
40,4%
18,3%
12,0%
1,6%
2,6%
2,1%
Strongly agree Agree Mildly agree Neutral
Mildly disagree Disagree Strongly disagree
N = 607
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6 Appendix: Overview of survey questions
Performance Management covers
the combination of management, methodologies and metrics,
supported by applications, tools and infrastructure
enabling users to defne, monitor and optimise results and outcomes to achieve personal or departmental objectives, while aligning
with strategic objectives across multiple organisational levels. (Source: Gartner)
1. How is the theme of Performance Management situated on your organisations radar?
We have been investing in Performance Management for some time now (1)
We recently started to invest in Performance Management (2)
We are planning to invest in Performance Management (3)
We are not interested in Performance Management (4)

2. Which functional areas in your organisation are giving top priority to Performance Management?
Strategy (1)
Finance (2)
Sales (3)
Products & Services development (4)
Operations (5)
Human Resources (6)
Information Systems and Technology (7)
Customer Service (8)
Marketing (9)
Risk and Compliance (10)
Procurement (11)
Other, please specify (12)

3. Which executive managers are driving your organisations Performance Management eforts?
CEO (Chief Executive Ofcer) (1)
CFO (Chief Financial Ofcer) (2)
COO (Chief Operating Ofcer) (3)
CIO (Chief Information Ofcer) (4)
CPO (Chief Performance Ofcer) (5)

4.1. How satisfed is your organisation with its Performance Management eforts contributing to the
following:
Exceeds expectations (1)
Meets expectations (2)
Below expectations (3)
Dont know (4)


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following:
Management of a comprehensive set of performance indicators
Dont know (4)

following:
Dont know (4)

following:
Dont know (4)

following:
Alignment of strategy formulation and execution
Dont know (4)

following:
Learning organisation
Dont know (4)

5. What do you believe to be the fve most important challenges to achieving Performance Management
success? Please rank your top 5 by clicking (1 = 1st most important, 5 = 5th most important)
Business rules analysis (1)
Education & training (2)
Understanding and managing user expectations (3)
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Data quality (4)
Data integration (5)
Vendor collaboration and support (6)
ROI justifcation (7)
Budget constraints (8)
Culture change (9)
Management sponsorship (10)
Time required to implement (11)
Analytical skills (12)
Tool capability (13)
Technical skills (14)
Computing power (15)
Collaboration between Business and IT (16)
Other (please specify) (17)

6.1. To which extent does... the BUSINESS SIDE of your organisation value Performance Management
Information as a corporate asset?
Too little (1)
Enough (2)
Excessive (3)
Dont know (4)

6.2. To which extent does... the IT SIDE of your organisation value Performance Management Information as
a corporate asset?
Too little (1)
Enough (2)
Excessive (3)
Dont know (4)

7. What are your organisations solution priorities for Performance Management?
Strategic management solutions (e.g. Balanced Scorecard, internal process management) (1)
Financial management (e.g. budgeting and planning, consolidated reporting, activity based management) (2)
Sales intelligence (e.g. sales forecasting) (3)
Innovation management (e.g. R&D management, manufacturing and process innovation) (4)
Supply chain intelligence (e.g. improve forecasting accuracy) (5)
HR value management (e.g. competency development, HR administration) (6)
IT value management (e.g. service level agreements, capacity planning, IT cost management) (7)
Service management (e.g. after market, expertise, recycling management) (8)
Customer intelligence (e.g. customer analytics, marketing automation) (9)
Risk management (e.g. fraud, security) (10)
Procurement (e.g. improve procurement function) (11)
Perjormunce Munuyement - 5urvey zc

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8.1. Which of the following Business Intelligence (BI) technologies does your company use for Performan
Management?
Standard reporting tools.
Used by professional developers to create standard reports for groups,departments, or the enterprise.
Yes (1)
No (2)
Dont know (3)
8.2. Which of the following Business Intelligence (BI) technologies does your company use for Performance
Management?
End-user query and reporting tools.
Used by end users to create reports for themselves or others, requires no programming.
Yes (1)
No (2)
Dont know (3)

Management?
Dashboards/Scorecards tools.
Allow end users to view critical performance data at a glance seeing graphical icons and drill down to analyze
Yes (1)
No (2)
Dont know (3)

Management?
OLAP tools.
Online analytical processing tools allow end users to slice and dice data dimensionally to explore data from
diferent perspectives and time periods.
Yes (1)
No (2)
Dont know (3)

Management?
Advanced analytics and data mining tools.
Allow business analysts to create descriptive or predictive models of business activity.
Yes (1)
No (2)
Dont know (3)

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Management?
Data integration and data warehousing.
Used as an integrated data household on top of which monitoring, analysis and reporting applications run.
Yes (1)
No (2)
Dont know (3)

Management?
Workfow and collaboration.
Enables users to both share and discuss information and collaborate in the context of a business process or
activity.
Yes (1)
No (2)
Dont know (3)

9.1. In your opinion, how will their importance evolve within 2 years?
Standard reporting tools .
Used by professional developers to create standard reports for groups, departments, or the enterprise.
Gain in importance (1)
Remain stable (2)
Lose in importance (3)
Dont know (4)

End-user query and reporting tools
Used by end users to create reports for themselves or others, requires no programming.
Remain stable (2)
Dont know (4)

Dashboards/Scorecards tools.
Allow end users to view critical performance data at a glance seeing graphical icons and drill down to analyze
Remain stable (2)
Dont know (4)

Perjormunce Munuyement - 5urvey zz

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OLAP tools.
Online analytical processing tools allow end users to slice and dice data dimensionally to explore
data from diferent perspectives and time periods.
Remain stable (2)
Dont know (4)

Advanced analytics and data mining tools.
Allow business analysts to create descriptive or predictive models of business activity.
Remain stable (2)
Dont know (4)

Data integration and data warehousing.
Used as an integrated data household on top of which monitoring, analysis and reporting applications run.
Remain stable (2)
Dont know (4)

Workfow and collaboration.
Enables users to both share and discuss information and collaborate in the context of a business process or
activity.
Remain stable (2)
Dont know (4)

10.1. How many BI technology vendors does your company use to support its Performance Management
eforts now? Within 2 years? Now?
None (1)
1 vendor (2)
2 to 3 vendors (3)
4 to 7 vendors (4)
8 or more vendors (5)
Dont know (6)

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10.2. How many BI technology vendors does your company use to support its Performance Management
eforts now? Within 2 years? Within 2 years?
None (1)
1 vendor (2)
2 to 3 vendors (3)
4 to 7 vendors (4)
8 or more vendors (5)
Dont know (6)

11. Which of the following BI technology vendor selection strategies best describes the situation for your
organisation?
Single BI-focused vendor (1)
Multiple best-of-class BI-vendors (2)
Same vendor as Infrastructure (e.g. data warehouse, database management system, data integration) (3)
Same vendor as Enterprise Application (e.g. Oracle, SAP) (4)
Same vendor as Enterprise Application and Infrastructure (5)
No preference (6)

12. Does your organisation want its BI technology vendors to become more knowledgeable in your
organisations business issues and go beyond just being a technology vendor?
Yes (1)
No (2)
Dont know (3)

13.1. Which of the following users in your organisation use Performance Management applications today?
Members of the Board of Directors
Yes (1)
No (2)
Dont know (3)

C-level executives
Yes (1)
No (2)
Dont know (3)

Senior managers
Yes (1)
No (2)
Dont know (3)

Middle managers
Yes (1)
No (2)
Dont know (3)
Perjormunce Munuyement - 5urvey zq

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Supervisor
Yes (1)
No (2)
Dont know (3)

Frontline personnel
Yes (1)
No (2)
Dont know (3)

14.1. In your opinion, how will the number of users evolve within 2 years?
Members of the Board of Directors
Number of users will increase (1)
Number of users will remain stable (2)
Number of users will decrease (3)
Dont know (4)

C-level executives
Dont know (4)

Senior managers
Dont know (4)

Middle managers
Dont know (4)

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Supervisor
Dont know (4)

Frontline personnel
Dont know (4)

15. Please indicate the appropriate answer in response to the following statement: Our organisation should
have a cross-functional team with specifc tasks, roles, responsibilities and processes for supporting and
promoting the efectiveness of Performance Management.
Strongly disagree (1)
Disagree (2)
Mildly disagree (3)
Neutral (4)
Mildly agree (5)
Agree (6)
Strongly agree (7)

16. You are working for:
a software or tool vendor (1)
a consultant (2)
a private company (3)
a public company (4)

17. Sector:
Automotive (1)
Banking (2)
Chemical & Pharmaceutical (3)
Consulting (4)
Distribution, Retail & Wholesale (5)
Energy & Utilities (6)
Finance (7)
Food & Beverage (8)
Government (9)
Health Care (10)
Human Resources (11)
ICT (12)
Industry & Manufacturing (13)
Insurance (14)
Media (15)
Perjormunce Munuyement - 5urvey z6

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18. Your functional domain:
Strategy (1)
Finance (2)
Sales (3)
Products & Services development (4)
Operations (5)
Human Resources (6)
Information Systems and Technology (7)
Customer Service (8)
Marketing (9)
Risk and Compliance (10)
Procurement (11)

19. Your position in the organisation:
Senior leadership / Executive (1)
Senior manager (2)
Middle manager (3)
Supervisor (4)
Individual contributor (5)

20. How would you describe yourself?
an IS/IT specialist (1)
a business specialist (2)
a combination of both (3)

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2007 by Vlerick Leuven Gent Management School. All rights reserved.
Every efort has been taken to verify the accuracy of the information contained in this report. It is believed to be reliable but
neither the authors, Vlerick Leuven Gent Management School nor the sponsor makes any guarantees or warranties as to the
accuracy or completeness of this report. No responsibility for reliance by any person on this report is accepted.
Te names of actual companies mentioned herein may be trademarks of their respective owners.
Tis document, or any portion thereof, may not be reproduced, transmitted, introduced into a retrieval system or distributed
without reference to this document.
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Contact details
Vlerick Leuven Gent Management School
Vlamingenstraat 83 - 3000 Leuven - Belgium
Website: www.vlerick.com

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