Assignments Assignment: Business Intelligence: Financial Reporting & Metrics (Outcome # 3,4) Context for Assignment For this week's assignment, you will be looking at the financial health of your organization, bench-marking it to industry standards regarding 12 key financial metrics and then creating KPI's, balanced scorecard indicators and targets and looking at dashboard reporting that can visually show results on a daily, weekly, monthly basis. Eyad : Industry, Financial services, Organization: Any Investment or commercial bank (I prefer a US based company and especially Fidelity Investments) Task Description  Go to the following website: http://thebusinessferret.com/key-financialmetrics/. After reviewing the 12 key financial metrics for a business, document which one of the twelve that your organization is already utilizing. And discuss how successful your organization is within these financial areas. Eyad : Use of debit financing, Real Revenue Growth, Sustainable revenue growth, pricing policy and pricing index are all applied to Fidelity Investments  Calculate those metrics that your organization is not currently using and discuss why tracking these metrics are important to your business' continued financial success. Eyad : Net Trade Capital, excess Cash, are not used by Fidelity  After researching KPI's that are standard for your industry, discuss which other Key Performance Indicators (KPI's) could apply to your organization and why. Eyad: List 1-2 KPIs the relevant to financial services industry  After researching the Balanced Scorecard method for tracking performance, discuss which metrics/indicators should be included within a Balanced Scorecard approach, including creating objectives, indicators and targets for each one within the scorecard model. If your organization already utilized a balanced scorecard, then discuss how you would change and/or enhance these indicators and targets within the scorecard.Eyad: you can mention that Fidelity doesn’t use scorecards and you are free to mention all possible and preferred metrics and indicators that are used in financial services industry  If your organization already has some type of dashboard within a BI system, then discuss (with research statistics to validate your decisions) your recommendations to update/change the results that are tracked and shown on the dashboard and reasons why. Otherwise, make recommendations for the look of a new dashboard with specific recommendations for types of metrics that would be displayed and why you are making those suggestions. Include the screen shots of the dashboards. Eyad : Fidelity doesn’t use Dashboard, you can use any exist good dashboard in the financial services industry, and use it as recommended one for Fidelity, you need to add a screen shot for this dashboard , if you couldn’t find any screen shots, please mockup a dashboard. Delivery When you are completing this assignment make sure that you included any competitive bench marking that you reviewed to compare metrics and key indicators. All recommendations should be validated by market research and actual organization financial measurements and existing financial statements. Your assignment should be 4 double spaced pages in length. APA format, use US English and 5 references Other readings and information might help in this assignment:  Three keys to analytics that work: http://ibisinc.com/businessanalytics/?gclid=CPfS7uW__c0CFQotaQod2W4Dkw  www.balancedscorecard.org. Select “Articles and White Papers”  www.balancedscorecards.com. Articles and case studies  www.cio.com. Various articles on the balanced scorecard  Read the Kaplan and Norton article on “The Balanced Scorecard: Measures that Drive Performance” from the Harvard Business Review.  "The Challenge of Strategic Alignment" The role of Scorecards and Dashboards in StrategyExecution: http://www.oracle.com/us/solutions/businessintelligence/064027.pdf  Good Business Intelligence tools for Dashboards: http://idealware.org/articles/beyond-dashboards-businessintelligence-tools-program-analysis-and-reporting  How to define KPI's in a BI system: http://searchbusinessanalytics.techtarget.com/feature/Definingand-using-KPIs-in-a-successful-business-intelligence-system  KPI template and examples: https://www.klipfolio.com/resources/kpiexamples Videos to Watch: Watch the IBM Watson Analytics video : “Refine the Data Set” Go to www.glik.com to find the following hidden insights videos:  Hidden Insights into Supply Chain Data (6:30 minutes) Looks at creating a dashboard and KPI’s  Hidden Insights in Healthcare data (5.41 minutes): Data systems-story across all of data-data analytics, profitability issues  Hidden Insights in Financial Services Data: scatter plot chart, geographic regions, delinquency trends, foreign exchange rates (4:31 minutes). BUILDING KNOWLEDGE BUILDING KNOWLEDGE: Types of Value in Implementing a Business Intelligence System (Outcome #1)  Financial value- improving profitability, revenues, costs (review financial statement information, balanced scorecard information, etc. and determine what information is most important)  Productivity value-throughput, improved processes, increased volumes, etc.  Trust value-customer, market, employee, supplier satisfaction  Risk value-improved customer and market visibility, reduced capital risks, regulatory compliance, fraud, etc.BUILDING KNOWLEDGE: What are KPI's? (outcome # 3,4) Operations metrics used to quantify performance are typically referred to as key performance indicators (KPI's). These type of metrics are very purposefully aligned metrics. KPI's match goals with performance expectations. You will be developing a list of similar KPI's for your own organization (project) that directly apply to your product and services. There are four areas of metrics performance regarding operations that encompass KPI's that include examples of each type*. Customer Performance:  Customer Satisfaction  Issue resolution (speed and accuracy)  Customer Retention Service Performance:  Service call resolution rates  Service renewal rates  Service level agreements  Delivery Performance  Merchandise return rates Sales Operations: New Accounts  Sales Meetings Scheduled  Conversion of Inquiries to Leads  Average call closure rates Sales plan/Forecast: Price to purchase accuracy  Purchase order to fulfillment ratio  Quantity Earned  Forecast to Plan (or budget) ratio Total closed Contracts *From: Business Intelligence a Managerial Perspective on Analytics by R. Sharda, D. Delen, E. Turban. Pearson, 2014. BUILDING KNOWLEDGE: What is a Balanced Scorecard? (Outcome # 3,4) One of the most important concepts you will learn in this course is how to measure your organization's performance through a balanced scorecard. So what exactly is a balanced scorecard? The balanced scorecard is a strategic management tool measuring multi-functional business performance that compares business goals to outcomes. And why would your company want to use a balanced scorecard to measure performance? Too many firms get caught up in a short term view of gaining market share and immediate profits. But long term decision making eliminates a myopic view of the marketplace, creates customer satisfaction and helps management make strategic investments that will benefit the business in the future. The best managers not only understand their own functional area of the balanced scorecard but how their management responsibilities and results affect other departments. All areas of the business need to work in unison with one another to have long term business success in the marketplace. Of course, the product lifecycle position of the company could have an effect on a temporary shift in balanced scorecard priorities. When Kaplan and Norton first developed the balanced scorecard model in 1992, they created four organizational perspectives that should be measured: Customer-that includes customer satisfaction, financial, internal business processes and learning and growth-that includes employee training, knowledge management (for data), corporate culture and technological change. All of the specific measurements developed for these four perspectives need to match your overall corporate vision and strategy. As you can see below, all four prospectives must have objectives, target indicators and targets aligned with them. There are also key questions for each prospective that should be asked prior to creating your balanced scorecard goals and objectives.BUILDING KNOWLEDGE: Usage of Predictive Analytics (Outcome # 3,4) Predictive analytics As you can verify with the Ventana Research statistics from the link above, financial forecasting is the number one usage of predictive analytics for organizations. You willlearn more about predictive analytics and how important they are to an organization's financial success in week five of the course. BUILDING KNOWLEDGE: Pressure on Profits (Outcome #1, 4) Listed in the "Pressure on Profits" chart below, there are six factors that influence the flux in generating profits. The marketplace is always evolving, so an organization's data and the way they utilize the data to research and communicate with their potential and existing customers is vital to the recurrent financial success of their business. This information could prove useful for your week four financial analysis of your organization. PRESSURE ON PROFITS Diminishing Returns on Marketing Investments (Law of Diminishing Returns): An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain at a constant. As investment continues past that point, the return diminishes progressively.Uncertain Regulatory Environment: Regulations are meant as a preventive measure for companies. Healthcare, Financial Services and Energy are the top three industries that have to comply with new regulations. More mandates mean transforming data tracking, gathering information and reporting. According to Forbes Magazine, 34% of CEO's are spending more time with regulators or government officials to interpret their uncertain regulatory environment. Demanding Customers: Customers that are demanding and sometimes more trouble than they are worth. Attrition Rate (Churn Rate): A measure of the number of individuals or items moving out of a collective group over a specific period of time. It is one of two primary factors that determine the steady-state level of customers a business will support. Generics: A consumer product having no brand name or registered trademark. Evolving Customers and Consumers: The change in consumer expectations over time. .