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The Decision Factor offers insightful comments and observations on analytics—from views on new technology approaches and market dynamics to the latest industry trends driving demand for faster, smarter information analysis. This blog contains personal views, thoughts, and opinions from SAP employees, mentors, and friends working in the area of analytics. It’s not endorsed by SAP nor does it constitute an official communication of SAP.

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Seven Common Scorecarding Mistakes to Avoid

Seven Common Scorecarding Mistakes to AvoidAny new endeavor takes time to master. Realistically, it takes at least three attempts to acquire the requisite experience needed to get it right. This is certainly true of IT projects (at least in my humble opinion). Not surprisingly, wise practitioners seek other experience and best practices to accelerate the learning curve and cut down on mistakes. A lot has been written about scorecarding projects, which on the surface, may seem fairly simple—after all, you‘re just reporting on performance indicators. Unfortunately, they aren’t that straightforward. Here are seven common mistakes to avoid.

Ending Up with Too Much of Everything

The tendency is to end up with too much of everything—objectives, key performance indicators (KPIs). You’ve got to boil it down to a few key objectives and associated KPIs. How many things can you really focus on? If you’re honest, probably a maximum of three.

To that end, you want to limit the number of people involved in the process to begin with. Too many people guarantees the process will slow to a crawl, you’ll surely end up with too many objectives, and have trouble reaching a consensus on a few key ones.

Biting Off More than You Can Chew

Studies show that large, complex projects are more prone to overrun and go over budget. So begin with a small-scale or pilot project. This helps you learn the ropes and work out the inevitable bugs. Remember, scorecarding should be part of an ongoing performance improvement program. The end-state isn’t the completed scorecard but the improvements it helps bring about.

Forgetting To Set Intermediate Milestones

Since performance improvement is a process, you need intermediate goals. Benchmarking programs that allow you to compare yourselves with your peers is a great way of establishing medium and long-term goals. First, meet an internal target. Then attempt to meet the average for your peer group. Finally, aim to become a top 25% performer. This isn’t much different in projects that need to be broken down into more manageable and achievable milestones.

Overlooking the Need for a Formal Methodology

A joint SAP/AMR survey of over 400 companies revealed that by having a rigorous performance management methodology in place (and adhering to it), you’re more than 50% likely to achieve your business case and return on investment, and twice as likely to finish the project on time and budget. Using a proven methodology raises the bar in the middle of the bell curve.

Yet, these same surveys reveal most organizations feel they can do better than they are currently. I suspect most people pick up project management along the way and receive little to no training. At the very least, key projects should be tied to specific objectives. They must be funded, be given adequate resources, and be monitored.

Lacking Leadership

Without leadership from someone with power and influence you’ll likely get a mediocre response. You need some way of getting people motivated and focused on the scorecards and what they’re telling you, even if this means mandating the use in the beginning. Leadership is needed when you’re building the scorecards so you have the resources and commitment needed to get them built. Leadership is critical afterwards to ensure attention is paid to them down the line.

Resorting to a Business-as-Usual Mindset

A change in culture, which is what you’re really doing, isn’t going to happen overnight. It requires constant nurturing and reinforcement, or else your company will revert to a business-as-usual mindset.

Not Providing Access to Scorecards

So after all this hard work, an all too common mistake is failing to effectively communicate or provide access to the scorecard to stakeholders— inside or outside the organization. If people don’t understand the need to focus on them, then don’t be surprised if they’re off doing something else.

At one time or another, I’m sure you’ve been in a building that has many clocks side by side showing the times in different cities around the world. That’s kind of cool. So, why not do something similar with scorecards? Take all those color-coded performance indicators and put them where people can see them. Making something visible is a very good way of getting people to pay attention to it, and the scorecard needs to be in the top of people’s minds all the time. The city of Boston’s CitizenInsight application is a brilliant example of this. 

Organizations invest an immense amount of money in scorecarding solutions. Avoid these beginner mistakes, and you‘ll be much more successful from the get-go.