Decisions - Business intelligence - Made to Measure.

(From Financial Director)

Byline: Peter Bartram.

Some companies are so caught up in the thrill of making accurate measurements of corporate minutiae that they're losing sight of the big picture. That's the message from a new report by Hyperion and Cranfield University School of Management, Business Performance Management: Current State of the Art (www.hyperion.com/cranfield). Financial Director has had exclusive first sight of the survey results.

This is despite whether all these figures actually help in achieving business objectives. In some cases, they could be doing more harm than good, says Bernard Marr, a research fellow in Cranfield's Centre for Business Performance. That's because managers are focused on hitting the performance target in view rather than pursuing the strategic objective behind it.

"It's always dangerous to communicate any measure out of context," says Marr. "Measures clearly drive behaviour. If I give someone five key performance indicators for the next year, then they'll make sure they deliver them. But if I don't give any indication of the context, they won't understand why they're important."

Marr cites the case of the call centre that wanted to cut the average length of calls to two minutes. As a result, agents started to race through the way they dealt with customer problems. They hit the two-minute target, but customer satisfaction declined because people felt their calls weren't being handled properly.

Cranfield's research suggests there are three main reasons why companies turn to formal business intelligence, what they term business performance management (BPM). These are to implement and validate their strategy, influence employee behaviour, and report externally on performance and corporate governance. Yet Cranfield's research, conducted in the US, suggests that only a minority of companies use BPM to plan or validate their strategy.