Sail soft data application research institute | Wang Wenxin
A major manifestation of BI project failure is not doing verification and not listening to feedback, which is due to the lack of closed-loop thinking. The reason why closed-loop thinking can promote the success of BI projects is inseparable from its core idea of “finish what you start, keep feedback and keep optimizing”.
BI projects without feedback and optimization can only be a stack of massive data applications, and their value can only stay at the level of providing data, failing to improve the management level and business level of the enterprise.
One of the most common closed-loop thinking in enterprises is PDCA closed-loop. PDCA is a basic method of quality management, which is divided into four stages, Plan, Do, Check and Action. Due to its universality, PDCA has been promoted to various management work of enterprises and become an effective method for enterprises to achieve closed-loop operation and management, which is well known to the majority of enterprises.
It is worth noting that in the closed loop of specific operation management, management not only needs “design” and “execution”, but also needs “monitoring” and “perfection”, emphasizing the combination of “process management” and “result-based management”. Under such requirements, PDCA closed loop and BI become an excellent combination. PDCA provides guidance for the implementation of ENTERPRISE BI application, while BI provides data basis for the PROCESS of PDCA. The two complement each other and finally realize the value, and THE BI project is successful.
The application of closed-loop thinking in BI projects can be viewed from three perspectives: data, business and management. Among them, the data closed loop is based on data flow, while the business and management closed loop is based on PDCA process.
I. Closed loop of data, business and management
1. Data closed loop
Data closed loop is easy to understand, in the BI project, the data will generally experience from the data source to data acquisition, data processing, data to show the complete process, data, applications, and the problems arising from the data in the application process and the feedback will be reversed transmission in the data source to improve the enterprise, so on, form a closed loop.
Shown in figure 1, for example, to a hospital data of closed loop, the data extracted from the business system, processed and show application form all kinds of data, and the application of data analysis and feedback was used to improve the business system, as a result, the data will continue to improve, data applications will constantly improve, form a complete data closed loop.
2. Business closed loop
The business closed loop can be understood as the closed loop of business process from decision making to disassembling target plan and finally to execution. In essence, it is a linear disassembling of specific business problems and finally returning to the achievement and monitoring of business goals.
As shown in the figure below, the business closed loop is built on the basis of PDCA closed loop, mainly including planning, organization, execution, supervision and assessment. The final assessment results and feedback are used to iterate and optimize the process of planning and dismantling objectives, thus forming a closed loop and continuously empowering the business.
For example, in the two development styles shown in the figure below, the end result of the same development task with and without closed loop is very different.
The left figure shows the extensive project development style, with unclear overall goals and lack of monitoring and feedback in the whole work process, resulting in a long delay in the early stage of the project and frantic work before the deadline.
Elaborating project development style, and shown in the picture on the right from the start to the task of refinement and break up in the middle of the execution of monitoring, to finally through feedback to adjust the task, and again returned to the standard process, the whole development process to form the complete business closed loop, whether people work or project management, have greatly been improved.
3, management closed loop
Similar to the business closed loop, the management closed loop is also based on the PDCA closed loop, but the difference is that the business closed loop focuses on the business plan, and the core is to achieve business goals. The management loop focuses on strategic monitoring and the core lies in achieving strategic goals. The management closed loop can be understood as PDCA closed loop, which integrates enterprise strategy and operation and then refines, and is composed of specific business closed loops as a whole.
As shown in the figure below, the management closed loop starts from strategy formulation, goes through the transformation of strategy, planning and operation, execution plan, supervision and learning, testing/adjusting strategy, and finally returns to strategy formulation and the formation of the closed loop. The whole process will use strategy map, balanced scorecard, process panel and other tools, is a complementary process of business plan and strategic plan.
Let’s look at an example of PDCA closed loop landing in BI system. Facing the dual challenges of cost and efficiency brought by internal and external pressures, a large manufacturing group found that the mode of rule by man and rule by law could not meet the management needs, so it was imperative to reform the management mode. Therefore, the enterprise began to focus on efficiency and set up a management by objectives system.
At the same time, the enterprise also realized that management by objectives can not be separated from information system, without real-time information system, the target is difficult to be measured and evaluated, and the results are difficult to control.
Therefore, the enterprise applied PDCA closed-loop to BI system to achieve effective target management. The detailed process is described below.
Planning phase (P) : Setting goals
In the planning stage, the enterprise firstly formulates key performance indicators of strategic objectives according to the group’s business strategy and the market environment.
Then, according to the actual data of the past period, the current goals are defined and decomposed layer by layer in the BI system according to the target decomposition process as shown below, so that the formulated goals are more reasonable and achievable.
The chart below shows the quarterly breakdown of its 2020 operating goals. Finally, the achievement of objectives at different levels is compared in the indicator monitoring kanban, and the performance of each department and staff is evaluated according to the achievement.
Execution phase (D) : Monitoring the status
In the implementation stage, in order to let the managers of the group and subsidiaries clearly see the implementation of the target, the IT department monitors the indicators of enterprise operation according to the dimensions of management level, affiliated unit, current year and so on, and develops horizontally by month to present the trend analysis of indicators and the effect of lean improvement.
At the same time, a horizontal comparative analysis was made between the group and each subsidiary, and the good and bad indicators were highlighted with different background colors and fonts.
Inspection phase (C) : periodic review and analysis
The purpose of review and analysis is to summarize the achievement of the work objectives of the previous stage, adjust the work plan of the next stage, and control the whole process of task execution by paying attention to the progress of the achievement of objectives, the record of problem feedback and the completion of measures.
This is where the importance of the business analysis meeting comes into play. In the past, each team reported good news but not bad news at the meeting. Even if the problem was pointed out, they would find all kinds of excuses to prevarication.
Now it is different. In the business analysis meeting, leaders no longer need to listen to personal reports. As long as they open the reports in the BI system, the KPI achievement situation is clear at a glance, and the focus of the meeting naturally shifts to more valuable content such as analyzing problems, formulating adjustment strategies and sharing successful experiences.
Treatment phase (A) : problem rectification and tracking
Finally, the company also developed the “quarterly improvement plan and Tracking” application in the BI system as shown in the figure below.
Because the review does not mean that the problem has been solved, the review is just the beginning, more important is to supervise and track the implementation of the rectification plan.
For specific problems, when making the rectification plan, the person in charge, the planned completion time, the actual completion time and the completion status should be clear, so as to implement the rectification measures.
At the same time, relevant measures and experience should be solidified as the implementation strategy of the next stage strategy.