Meaningful insight and quality data are crucial to good decision making. Every organization is faced with challenges in understanding which systems to track, what data to analyze, and how to draw intelligent findings that will help drive your business forward. We’ve made some big investments in 2016 to help our clients glean better Business Intelligence when it comes to managing their IT ecosystem.
There are generally two kinds of Key Performance Indicators (KPIs) that your business can watch: Leading Indicators and Trailing (or Lagging) Indicators.
Trailing indicators are typically retrospective; data outputs and system results based on performance. They are easy to measure but hard to improve or influence; due simply to the fact that you can’t change the past! Great examples are the statistics that most companies gather around revenue, profitability, and spending. Trailing indicators are the simplest KPIs around; you ask “Did we achieve our goal of 20% growth in sales for Q1?” … And then your team looks at the performance data and answers definitively, “yes” or “no”. Rising unemployment rates for a city or nation are typically understood as a trailing indicator of an unhealthy economy. But if people have already lost their jobs, if the building is already on fire, if your company is already losing profits, the trailing indicators aren’t very helpful.
The inherent challenge with trailing indicators is that they are necessarily backward looking. It’s yesterday’s data. History is filled with tragic stories of those who identify important information (or trends) too late.
The leading indicators come before the trend. They are the predictive signals of future events. Think about how the yellow traffic light indicates the coming of the red light. Employee happiness is a well-proven leading indicator for customer satisfaction. A drought in the summer is usually a leading indicator for lower crop yields in the fall. They can be harder to measure, but much easier to influence. In other words, it’s easier to extinguish a fire when you smell a bit of smoke (leading) rather than when you see the office already burning (trailing).
Here’s an example from our world as an IT service provider: An increase in support calls from a particular client can be a leading indicator for a systemic problem with their infrastructure. But for that to be meaningful, we have to be watching the data to see the pattern emerge and afford ourselves the opportunity to fix it before a crisis happens.
We are always looking to reduce operational issues with our managed services clients. Our goal is to get as close to zero as we can! We can (and do) measure the number of hours we spend with each client and we take that as a leading indicator. And then we can measure performance by looking at the trailing indicators such as client survey response data, downtime, and error rates.
You want a mechanism to help identify smoke before the fire. You need tools to perform some kind of predictive analysis to help you avert trouble and capture opportunity. The trick is in carving the time to get it done and finding the right tools that fit the data and systems you want to measure and analyze.
In early 2016 we made some major investments into a new Business Intelligence (BI) tool that is helping us with data visualization and analytics. We have formalized Knowledge Management as a core business function for ITW and we have a dedicated team of experts focused on developing better insights for ourselves and for our clients. These tools are now the platform for our new client portal where we will be delivering better real-time analysis and reporting for our clients (and of course, internally for ourselves).
Wrapping Business Intelligence tools around all our services and our internal processes is about empowering better decisions and enhancing client experience in a predictive and meaningful way. Curious about our new client portal or how we can help you better manage your IT? Reach out.