PERFORMANCE MANAGEMENT: Data Driven Companies Increase Productivity and Profit
Recent Gauteng Business News
A recent study conducted by the MIT Centre for Digital Business in conjunction with McKinsey revealed that data driven companies have 4% higher productivity and 6% higher profits than companies that are not data-driven. This increased productivity and profit could make an enormous difference to companies that identify the importance of data-driven decision making.
“The only way to get the most out of your data and make data-driven decisions is to ensure that your Enterprise Performance Management (EMP) System is adequately aligned to your overall business strategy” says EOH Softworx director of Performance Management, Steven Joffe. “At present, 70% of EMP solutions do not achieve their original objectives. This is because, while technically the solutions are sound, they do not actually address the organisation’s needs,” explains Joffe. “Many organisations allow different departments to select a solution that does not necessarily support the company’s overall business strategy and as a result, do not align key performance indicators to their business strategy.”
Understanding is Key to Create Data Driven Companies
After years of EMP systems, there is still a gap between IT and real business strategy. Company departments feel that IT is not partnering with business to develop new capabilities supported by technology. “This is not because the technology is not useful, but because it has not been adequately aligned to deliver quantifiable improvements in productivity and profits,” says Joffe.
In general, the Southern African market is quite immature, with most businesses using a multitude of tools for similar requirements in different business areas. Internationally, we have found there to be a greater understanding of business requirements and solutions and how these tie into the organisation’s business strategy. International clients are also looking for the value add that EMP solutions can provide whereas local clients are usually just wanting to automate current processes or replace manual systems,” says Joffe.
Business Strategy Implementation Important in Data Driven Companies
While it is often beneficial for companies to use multiple systems to fulfil their overall EMP requirements, it is vital though to ensure that these are all aligned to the company’s overall business strategy. The solution needs to be decided on and bought into at directorship level and then implemented into the business as a continuous process to ensure successful implementation. The continuous process will help to align the business users and the company strategy, as well as the change management of business users through the process.
EMP systems have an important role to play in helping organisations to make data-driven-decisions and increase companies productivity and profit. However, there is still a need for increased alignment between EMP solutions and real business strategy in order to make this a reality and help create these data driven companies.
Business News Sector Tags: Management|