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Performance management for SMEs based on open source

Performance management methods, such as the balanced scorecard (BSC), are being used by an increasing number of small and medium-sized enterprises. There are now automatic systems for logging, mapping, adjusting and distributing key indicators in the form of business intelligence solutions which can even be useful for reporting operations at small and medium-sized enterprises. The TECHNUM Steinbeis Transfer Center, which specializes in technology-based business management, has been working with an SME partner on the development of a BSCbased solution which uses open source software to help companies standardize and automate data cleaning and the capturing and sharing of key indicators.

Performance management systems provide users with structured, rapid-turnaround data for analyzing their company. As well as providing an overview, these systems assist users in examining data relating to key indicators in the company and core processes. The detail provided can help highlight possible risks well in advance.

The balanced scorecard introduced by the Steinbeis team on board helped managers with their strategic company planning and management reviews. It also helped document company performance for use with certification, audits and customers. Before the project with Steinbeis, the company only evaluated data on its balanced scorecard once a year, mainly due to the effort involved. So this exercise was only really useful for review purposes. The task was laborious because gathering, cleaning, calculating and finally evaluating information – on 20 key indicators, from a variety of sources – had to be carried out manually. So one of the Steinbeis experts’ initial priorities was to automate the whole process of gathering and showing key indicators.

This highlighted several targets for the ensuing project:

  • The BSC should remain clear and well structured, but information should be more detailed, both at the report level and when drilling down
  • Reporting should be automated
  • The software should be easy to use and expandable
  • software should not cost too much
  • Data should be pooled automatically from a variety of sources

The team knew that the project would present several challenges. To map the existing balanced scorecard, the team members used a software package called BIRT (Business Intelligence Reporting Tool). This software already comes in an open source version, which instantly meant it would be cheaper to acquire and buy licenses for. It also provides plenty of inbuilt options to continuously upgrade features, generate new types of reports, change existing reports provided by the system, or even integrate new features.

To work alongside this solution, the team also decided to use an open source package called Talend with the aim of integrating information currently stored by the company in Excel spreadsheets. This software also supports extract-transform-load (ETL) processes. Talend makes it possible to maintain uniformity across the different types of data accessed by the BIRT system. The first step involved pulling the data needed for individual reports out of the database and cleaning up any rogue readings with specially designed filters. This automated query process is an effective way to keep data secure and keeps data uniform, even over extended periods. Armed with this data, the system is then in a position to calculate key indicators as required and graph them.

One of the advantages with the method used to display key indicators is that it provides dynamic drilldowns. This allows users to investigate indicators broken down by constituent part. The BIRT system also has dynamic diagrams produced by mouseclicks. It is also possible to merge individual reports into higher-level reports and visualize data with diagrams, thus allowing users to look at the whole BSC from different angles, such as finances, processes, potential, clients and the environment. The main indicators provide an easy-to-follow overview of the key issues facing the company and how the situation has developed over time. In combination with the drilldown function and individual reports, users gain a precise appreciation of specific key indicators from a variety of perspectives.

Aside from looking at actual figures, the system was set up to allow users to add targets by key indicator and show these targets in the reports. The software marks up key indicators in color if they are not within target. If users need to quickly access more information while viewing the higher-level reports, there are links down to the individual reports making it possible to analyze possible causes and track a key indicator over time.

There are a number of ways to access the BSC. One is a reporting tool which allows users to call up reports manually straight from the system. At regular intervals, the system also automatically generates PDF files showing all the key indicators for a specific period of time. The decision to use open source software meant that as well as not having to pay for a license to use the solution, the company will always be able to extend the system. Moreover, because the data is based on a common format and the BSC scores are calculated automatically, it is always possible to view up-to-date business indicators. Thus, as well as addressing problems promptly, managers can now make logical and sensible decisions based on hard facts.

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