Performance Indicator Analysis: DELTA model and 5 stages
Performance indicator analysis plays a fundamental role in business. While preparing the syllabus for the last event I conducted on Performance Indicators, I came across an article from Harvard Business School called “3 examples of business analysis in action” and I'd like to share it with you.
From the article, I had access to the DELTA model and the 5 stages of organizational analytical maturity, which I didn't know and found very interesting! These 2 methodologies together provide support for diagnostic steps (AS-IS) , continuous improvement (TO-BE) and for making the organization oriented towards “evidence-based decision making”.
(This month's newsletter is a free translation of the article “DELTA Plus Model & Five Stages of Analytics MaturityA Primer”, written by Tom Davenport)
DELTA model
The DELTA model is an acronym and presents 5 elements that must be aligned for organizations to be successful during performance indicator and data analysis - to avoid weak or limited results.
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Data: Data must be clean, accessible, organized, unique, of high quality and integrated
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Entreprise-focus: Data analysis with a single, centralized and consistent perspective so that there are no duplicated efforts and tools, errors in analysis, inefficient use of resources, conflict between different groups and greater complexity of analysis between projects.
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Leaders: All levels of leadership embrace data analytics and drive the company's culture of data-driven decision making. In addition to the CEO or other top executive, all leadership should support data analysis
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Targets: Data analysis efforts must be aligned with specific strategic targets and corporate objectives
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Analysts: Talents for executing strategy in a complex and dynamic business environment. These professionals must have technical and interpersonal skills, business knowledge and the ability to train others
Five stages of organizational analytical maturity
The maturity model helps companies measure their growth, strengths and weaknesses in the 5 elements mentioned above.
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Stage 1: Analytically impaired. These companies rely mainly on intuition to make decisions, don't have a formal plan to become more analytical, aren't asking analytical questions and/or don't have the data to answer them. Their leaders may not be aware of analytics and what can be done with this data.
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Stage 2: Localized analysis. Reports exist within groups. There is no means or structure for collaboration in the use of data analysis. This often leads to “several versions of the truth” in an organization.
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Stage 3: Analytical aspirations. These companies know the value of data analysis and intend to improve their resources for generating and using it. So far, however, they have made little progress in this direction.
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Stage 4: Analytical companies. Highly data-driven companies have analytical tools and make extensive use of analytics with coordination throughout the organization. However, there remains a lack of commitment to strategic use.
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Stage 5: Analytical competitors. These companies use analytics strategically and comprehensively throughout the company and use analytics as a competitive weapon.
The author recommends using the 2 tools together, i.e. each letter of the DELTA model can be at a different stage of maturity.
Example:
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Analysts may have many skills, but the data is not integrated
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Goals are aligned with corporate objectives, but data analysis is not global
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The leadership is aligned, but the data is scattered
In short, each organization has its own characteristics and it is important to identify weaknesses so that they can be minimized for the sake of continuous improvement.
Based on the information above, what stage of analytical maturity is your company at? What are the weakest elements of the DELTA model? How can they be improved? At this point, the Quality professional can use this methodology and stand out in the workplace with accurate analyses based on well-established techniques.
For more information on Performance Indicators, check out our post here!
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