Should we buy or build our KPI management system?

The management of Key Performance Indicators (KPIs) often raises the question: Should we buy an off the shelf product or should we build our own unique system?. The conviction that company information is confidential, private and for management use only raises the false assumption that the systems providing the information have to be unique. How many times have we heard the statement that “our company is unique and therefore we need a unique (bespoke) system, it will give us competitive advantage” as part of the argument to build or buy.

Nonsense! It is of course true that the data should remain confidential and it is unique but the structure of the data and its presentation will be similar across all companies/organisations and the same across industries. How many different ways can revenue be presented? How many unique cost lines are there in a business?

Look at the research

Should sales calls be presented as a line or bar graph or as a number? The real point here is that over the past 10 years significant research and investment has gone into how to best present this information and therefore the need to re-invent the presentation systems has long since gone away. The significant change in the past three years has been the emergence of Software as a Service (SaaS) Business Intelligence solutions. This has shaken things up a bit. With these solutions there is a need to export (company confidential) data to a cloud environment. With the general acceptance that there are no longer any additional security issues with the Cloud comes the need to look at exactly what data will be exported.

Then the 80:20 rule comes into play, that is, 20% of the data will provide 80% of your corporate management needs (and frequently even less data will provide all of your corporate management needs). The realisation soon dawns that 80% of the data is not actually needed and therefore the need for the antiquated systems that produce the data is not needed either.

It’s complicated

This is of course an over-simplification of a much more complicated situation, however, the advent of SaaS based KPI software solutions have given a viable route to ring-fence certain areas of corporate management and experiment with tried and tested new technologies. That way, you can take advantage of product vendors investments rather than re-inventing and investing yourself.