Enterprise Dashboards: The Strategic Role of the CIO

Professor Vallabh SambamurthyEli Broad College of BusinessMichigan State University

Objectives

• How do firms compete effectively in the digital era?

• What are enterprise dashboards?• How can CIOs contribute toward leading and catalyzing their enterprise dashboards?

Competitive Challenges in the Digital Era

BusinessResults

Keys to Competitive Success

• Generating and sustaining high rates of innovation in products, services, business processes, and business models

• Crafting and sustaining intimate customer relationshipsthrough emphasis on customer acquisition, retention, and monetization

• Sustaining high levels of operational excellence and productivity across their operations 

• Sustaining high levels of agility and resilience to withstand potential business threats and seize competitive opportunities

• Developing the insight and willingness to leverage current and emerging information technologies

Keys to Competitive Success• Competitive success will require development of 

capabilities, structures and processes for– Continuous innovation– Customer intimacy– Operational excellence– Agility and resilience

• Information technologies provide the opportunity to facilitate the world‐class development of these capabilities– Digital savviness

• Ability to acquire and implement important information technologies for the business

• Ability to apply information technologies in enhancing or building new business capabilities (e.g., customer relationship management)

What is the Business Challenge?

• Most executives focus on financial performance (e.g., profit, margin, sales) as indicators of competitive success

• Yet, financial performance is only a lagging indicator and the “visible tip” of the iceberg

• Important capabilities are intangible, difficult to measure, but they are the critical leading indicators of competitive success

Financial Performance

• Continuous innovation• Customer intimacy• Operational excellence• Agility and resilience• Digital savviness

What is the Solution?

• Enterprise dashboards– A commitment to managing the business from a broader perspective that emphasizes financial metrics and business capabilities

– Investment in processes for measuring and managing the intangible business capabilities

– Investment in tools and technologies for monitoring performance against the comprehensive set of financial metrics and business capabilities

What are Enterprise Dashboards?

• Based on the balanced scorecard framework

What are Enterprise Dashboards?• They capture data about key performance indicators that 

are defined for each of the important elements of a firm’s competitive performance– Metrics for financial performance (margin, EPS, sales revenue)– Metrics of customer relationship (customer satisfaction, number 

of new customers acquired)– Rate of new product innovation (number of new products or 

services)– Operational excellence (fulfillment cycle time, product defects, 

productivity)– Learning and growth (quality of human capital, number of 

training programs)• Enable executive decision‐making by showing 

comparative trends

An Example: CEO Dashboard

Another Example: CEO Dashboard

An Example: A Marketing Dashboard

Benefits of Enterprise Dashboards

• They help the top management team manage competitive success despite the growing complexity of their business and competition– Attention to financial performance and the drivers of this 

performance (i.e., capabilities)• They can be customized for the CEO and the leaders of key 

functions and processes – Focus on specific key performance indicators related to the capabilities 

and financial metrics• They can be automated to capture ongoing performance data 

and provide accurate and reliable information for executive action

• The key benefit is that the CEOs and other business leaders can focus on the few important indicators that enable their firm’s competitive success, without getting inundated with lot of information

What should the be the role of a CIO?

• Engage and participate in the development of their enterprise’s dashboard– Most of the significant business capabilities are enabled through information technology

• Example, customer relationship management, data warehousing and data mining technologies

– CEOs, CFOs and other business leaders will increasingly value the contribution of their firm’s IT function in designing and implementing effective dashboards

• With the growing size and complexity of the IT function, CIOs should also develop and adopt a dashboard for IT management– Traditionally, the performance of the IT function has been measured through cost of IT operations and reliability/availability of IT services

– However, the real value and contribution of IT lies in enhancing the firm’s digital savviness

• What percentage of the business processes have been upgraded and modernized?

• To what extent is enterprise data available to guide analytics and decisions about customers, stores, and operations?

What should the be the role of a CIO?

16

A CIO Dashboard

Performance Area

Scop

e of im

pact

Busin

ess Business KPIs

Revenue Customer Satisfaction Profitability Service/product performance

Business KPI Improvements

Improvements in:• Revenue, profitability• Customer satisfaction • Service/product performance

Business Innovation• New revenue • Product enablement/features• New business capabilities• Innovation process measures

Busin

ess 

Process Business Process KPIs

End-to-end business process performance (reliability, efficiency, cost , compliance, asset productivity)

Business Process KPI Improvements

Improvements in business case for end-to-end business process: (reliability, efficiency, cost, compliance, asset productivity)

Business Process Innovation

• Contract manufacturing• Acquisition Integration• Integration with partners• Innovation process measures

IT

Operations Performance Availability, Reliability Cost benchmarks and trends Help desk metrics User satisfaction Information quality metrics

Project Performance On time On budget On scope User satisfaction

Technical Innovation Platform performance

improvements Employee training/certifications Innovation process measures

Operations Projects Innovation

Conclusion

• The complexity of business and the growing pace of competition is compelling firms to develop comprehensive approaches toward strategic performance management

• Enterprise dashboards provide a solution by balancing attention between financial performance and the leading indicators based on critical business capabilities

• CIOs should engage in the development of their firm’s enterprise dashboards because IT could provide a strategic platform for these initiatives

• CIOs should also focus on enhancing their firm’s digital savviness by developing more comprehensive dashboards for the IT function