Standard Wire

Edition 14 – May 2007

Business Intelligence & Quality Management Systems

The integration of Business Intelligence tools with an organization’s Quality Management System or QMS can lead to significant cost reductions and more effective implementation of quality goals. Business Intelligence tools are used for measuring operational performance. From a QMS perspective, BI tools now provide an overarching look into the enterprise’s performance.

Doesn’t matter whether you are a single location company or a global enterprise with extensive product lines, measurement creates accountability. You get results by tracking ownership of data and completion of activities. Measurement is essential in quantifying performance gaps and providing insights into root causes of inadequate performance. Measurement links quality management and performance to strategic planning and operational execution via the use of specific BI tools. BI quantifies the mapping and measuring of performance of business processes to quality goals and objectives. Remember quality performance software has evolved from an individual’s toolkit into an enterprise solution focused on increasing access to resources and overall participation across the organization.

So we are all on the same sheet of music, I will define some terms.

First, what is a Quality Management System (QMS)? First, a “system” does not necessarily mean software and computers. Your systems can be a collection of file folders, excel spreadsheets, Word Doc, Visio charts, auditing procedures or combinations thereof. A QMS is a common sense, well-documented system ensuring enterprise-wide consistency & improvement. The QMS is based on standards such as ISO 9000, 13485, ITIL, etc., which specify procedures for achieving effective Quality Management and Performance. The tracking and measuring of performance is critical to any enterprise’s ability to maintain operational success and meet it’s stated quality goals. Our focus is a best practices system improving your quality ROI while meeting your internal standards.  QMS software solutions include best practices that utilize Business Intelligence for:

· Risk Management

· Customer Satisfaction

· Infrastructure Management

· Security Management

·         Continual Improvement

·         Corrective and Preventative Action (CAPA) - Internal Audits

·         Customer Complaints and Non-Conformances

Second, Business Intelligence (BI) is simply a term referring to applications and technologies used to gather, access, and analyze data and information about the enterprise. BI helps companies have a more comprehensive knowledge of the factors affecting their business, via metrics on performance, internal operations, etc. The goal of BI is to make enable you to make better business decisions with a fuller knowledge of the enterprise’s strengths and weaknesses. Typical BI terms you may hear are:

1. OLAP - stands for On Line Analytical Processing. It is an approach to quickly provide the answer to analytical queries that are dimensional in nature. Databases configured for OLAP employ a multidimensional data model. This allows for complex analytical and ad-hoc queries with a rapid execution time.

Other pieces of OLAP include:

· Extract Transform Load or ETL

· Relational Reporting

· Data Mining. Applying OLAP in managing business processes

2. Pivot Table is another term. A Pivot Table is a powerful data summarization tool. A Pivot Table can automatically sort; count, and total data stored in a spreadsheet and create a second table displaying the summarized data. Pivot tables are useful to quickly create cross tabs. The user sets up and changes the summary's structure by dragging and dropping fields graphically. This "rotation" or pivoting of the summary table gives the concept its name. The output of an OLAP query is typically displayed in a matrix or pivot format. The dimensions form the row and column of the matrix, the measures, and the values.

The rationale for using BI is that the technology enables the enterprise to make more informed business decisions and reduce operating costs. BI improves the timeliness and quality of information. Managers are better fiscal and risk managers of the organization’s infrastructure. BI helps companies analyze changing risk trends; changes in customer behavior; customers' preferences; company capabilities, and market conditions. Business intelligence can be used to help managers determine which adjustments are most likely to respond to changing risks. When a BI system is well-designed and properly integrated into a company's processes and decision-making process, there is improvement in the company's performance.

So what are the overarching characteristics and an effective QMS we are looking for?

· Clear & current policies regarding processes, risk management, & continual improvement

· Sustainable, within multiple product lines

· Well-defined Responsibility & Authority

· Direct Sight” enterprise-wide to track performance and examine and correct root causes

· Immediacy of information - ad hoc reporting

· Real-time access of data in a central repository

Once we have this, then you can begin using BI. The first key element is the Key Performance Indicator (KPI). KPIs are metrics that are tied to an objective with at least one defined time-sensitive target value, with explicit thresholds which grade deviance between the actual value and the target. KPIs are either financial or non-financial metrics used to quantify objectives to reflect the strategic performance of an organization. A KPI is used in business intelligence to assess the present state of process/activity and to prescribe the course of action. The act of monitoring KPI's in realtime is known as business activity monitoring. KPIs are frequently used to "value" difficult to measure activities such as engagement, service, and customer satisfaction.

With KPIs we can integrate then into two BI tools:

The first is the Balanced Scorecard. BSCs were designed by Robert Kaplan and David Norton in 1992. BSCs allow the manager to link corporate objective with specific KPI and projects. The enterprise can match performance in meeting long term goals. For example, most failures in meeting quality goals are due to misalignment of the stakeholder analysis to the strategic alignment and direction. The BSC can align the company’s long-term strategies with the quality projects and track the data so that the information is actually a treasury of data to the company.

The second tool to integrate the KPIs to quality performance is the dashboard. The KPIs become gauges on your dashboard. You don’t have to look under the hood to see if your engine is over-heating or your car needs gas. Gauges on the dashboard tell you at a glance what’s running smoothly and what needs attention. Dashboard gauges allow you to manage your QMS in the same way. Business dashboards bring you complex information in a simple, graphical format. Dashboards condense large volumes of information to show the big picture and give you important warnings. You view and combine data in a way that lets you immediately see areas of concern, trends, limits surpassed, unmet quotas, and other indicators.

Now when a violation of a KPI threshold occurs you can take appropriate action. Corrective and Preventative Action (CAPA) is the process to determine the root cause and make improvements. Further, you can set up Alerts and have automatic escalation. Alerts and KPI thresholds are opposite sides of the same coin. Alerts are actions taken once a KPI threshold is reached. Alerts may or may not be defined for every threshold boundary. Alerts serve as a warning system when a KPI shows poor performance or an undesired trend. Alerts should trigger attention-capturing actions such as automatic e-mails and/or visual indication such as blinking or animation on the dashboard. Alerts function to promote management-by-exception. With the ever-growing information load, it is possible that a user may overlook a red flag in a KPI. Alerts in conjunction with automatic escalation insure that any negative exception is not overlooked and that appropriate personnel are informed immediately. In addition to dispersing the information to the right person at the right time, alerts may also be deployed to introduce system-controlled checks and balances and to institute appropriate actions or events. For example, if inventory level goes below the safety stock level for a certain part, an alert may trigger a purchase order in the system for a preset quantity against the supplier of that part. You have closed-the-loop insuring when a threshold is violated corrective action is taken and implemented.

In Summary -  The integration of Business Intelligence supports KPIs that populate Dashboards and Balanced Scorecards. Using OLAP and Pivot tables from existing data sources such as Excel spreadsheets, dBase files, flat files, and/or relational databases you have drill down to supporting details in multidimensional reports, and ad hoc queries. In other words, view your business information in the way most meaningful to you. These elements coupled with alerts and escalations are the key tools of a “closed loop” performance system to define and measure progress towards your quality goals.

About Vintara - Vintara is the leading provider of fully automated, web-based enterprise quality and performance management solutions and services within the international accredited standard environments of ISO 9000, 13485, and ITIL. Incorporating internationally recognized current best manufacturing practices, our software’s functionality and innovative technology crosses all quality and process standards to deliver the solutions that manage and administer quality, content, documents, and processes to meet international standards and requirements for ISO 9000 and medical device manufacturing. The portal gives enterprise-wide Visibility to insure best practices and strategic alignment with the company’s goals.

Contact Steve Anderson at sanderson@vintara.com or 877.VINTARA or 877.846.8272
Visit at www.vintara.com