Fuel Better Business Performance Management
with Exception Management
Maximise Business Intelligence Through the
Strategic Use of Exception Management
Exception management refers to the process of identifying, assessing, and managing outliers or anomalies in data sets – a process that holds profound significance in running a business effectively and seamlessly.
In today’s competitive landscape, where everyone has access to similar kinds of data, exception management offers a unique edge and plays a critical role in modern business performance management.
While conventional wisdom tells us to focus on general trends, exceptions often hold the key to transformative business insights.
They serve as red flags that signal underlying issues, or gold mines that offer unprecedented opportunities to improve the management efficiency of a particular entity within your business.
Exception management refers to the process of identifying, assessing, and managing outliers or anomalies in data sets – a process that holds profound significance in running a business effectively and seamlessly.
In today’s competitive landscape, where everyone has access to similar kinds of data, exception management offers a unique edge and plays a critical role in modern business performance management.
While conventional wisdom tells us to focus on general trends, exceptions often hold the key to transformative business insights.
They serve as red flags that signal underlying issues, or gold mines that offer unprecedented opportunities to improve the management efficiency of a particular entity within your business.
Momentum and Daily Averages
Understanding the momentum of a business is critical. An upward and positive trend in business momentum indicates growth.
Assessing business momentum involves tracking daily averages and analysing trends in KPIs, financial metrics, and other relevant factors, over time.
Businesses can then better understand their overall health and trajectory, and make informed decisions to capitalise on positive trends or address challenges to regain momentum.
Short, Medium and Long-Term Indicators
In every business, there are management levels responsible for the tactical (short-term), operational (medium-term), and strategic (long-term) elements of the business.
Depending on your business’s industry and environment, tactical can relate to a 30-day view of your business performance; operational to a 60-day view; and strategic to a 90-day-plus view.
Aligning this to the momentum of your business, a decline in your momentum in the short, medium or long-term, would determine the management level in your organisation responsible for taking action to turn your momentum around.
Triggers & Automated Alerts
When your business momentum declines and performance drops below a pre-defined metric, then an automated alert is triggered to signify that immediate action is required.
As long as your performance is below the pre-defined metric, your performance will display a red icon, indicating the need for an intervention. One can easily see that a green icon therefore means performance is on track, while an orange icon indicates a decline not yet below your pre-defined metric.
Proactive Problem Solving
Referring back to the levels of management responsibility and the short, medium, and long-term indicators, an automated trigger would prompt the tactical team to resolve the problem in the short term (i.e. in 30 days).
This team would delve into the reasons behind the anomalies, formulate a strategic solution, fostering a proactive approach to problem-solving. Should the problems not be resolved in the short term, it is then escalated to the operational management, followed by the strategic management.
To avoid the escalation, a set of processes are put into place to ensure immediate and effective action is taken. Through a workflow process, the system creates a document to define the necessary corrective actions and also sets up a meeting with the appropriate team. The solution is captured to an AI-driven knowledge base, which can be used for automated remediation in the future.
Features of Exception Management
Understanding exceptions in your data is just the tip of the iceberg, managing them effectively is where the real goldmine of insights lies. Here are key aspects of exception management in business intelligence:
Features of Exception Management
Understanding exceptions in your data is just the tip of the iceberg, managing them effectively is where the real goldmine of insights lies. Here are key aspects of exception management in business intelligence:
Benefits of Implementing Exception Management for Business Performance Management
Process: Implementation of Exception Management
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1
Data Collection
Gather data from all relevant sources. The more comprehensive the data, the more accurate your exception reports will be.
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2
Data Cleaning
Preprocess the data to remove any noise or irrelevant information. This step is crucial for the algorithms to work efficiently.
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3
Target Identification
Set up triggers that alert you to changes in the ongoing performance of your defined KPIs, targets and key metrics.
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4
Exception Alerts
Utilise statistical techniques or ML models to identify exceptions automatically. These alerts proactive insight into any fluctuation in the data.
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5
Exception Evaluation
Not all exceptions are valuable. Assess the identified exceptions to determine their business relevance.
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6
Action and Review
Develop strategies to manage these exceptions. This could be an automated response or could involve human intervention at a tactical, operational or strategic level.
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7
Feedback Loop
Continuously monitor the effects of your actions to adjust your exception management processes and capture your solutions to an AI-driven knowledge base.