What can be done to improve this situation?

Driven by strategy and oriented to business processes

As has already been noted, one of the main problems is the decentralized creation of reporting systems on the initiative of individual company departments or divisions. The performance indicators reflect the terminology and the intended purpose in the specific departments. If these figures are fed into a centralized reporting system, the issues described above raise their ugly heads because the same terms do not cover the same content.

This problem can be solved by replacing the present bottom-up approach for the centralized reporting with a top-down approach driven by the corporate and the business intelligence (BI) strategies. The most important feature of such a top-down approach is the alignment of decentralized and centralized performance indicators.   

A suitable means for transparent representation of corporate strategy with the aid of performance indicators is the use of strategy maps as described by KAPLAN / NORTON.[2] The corporate goals formulated in the strategy map are transformed into measurable targets by the allocation of suitable performance indicators, and just these performance indicators have to be presented in the central reporting system to support corporate management.

As strategies for individual company divisions are developed, these central performance indicators are further refined “from top to bottom”, their relevance for the management of the company divisions is identified, and the central and divisional aspects of the performance indicators are aligned. These aspects also include differentiation in the designations, specific but exact definitions, and the precise descriptions of the hierarchical levels in the dimensions. Once the performance indicators have been defined using this approach, the basic performance indicators derived from the source data in conformity with these definitions can be aggregated toward the top without any inherent contradictions – provided the data quality is in order and the data are complete. But none of this is automatic.   

Prerequisite is a centrally maintained data dictionary as a component of a metadata management system. The terminology to be used at corporate level as well as specific departmental terms are stored and maintained in this dictionary as the result of an internal coordination process. These definitions and the agreed designations are binding and must be used in the respective reports. This works best when the various reporting tools have direct access to the metadata in the dictionary and the formulas for the calculation of derived or condensed performance indicators can be obtained straight from this source.

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