InetSoft Webinar: The Difference Between a Singular Measure and an Analytic Measure

This is the continuation of the transcript of a Webinar hosted by InetSoft in February 2018 on the topic of "Business Intelligence Agility" The speaker is Mark Flaherty, CMO at InetSoft.

The difference between a singular measure and an analytic measure is singular measures tend to be easier to manipulate and cheat on. Sales in dollars is a singular measure. The chance of you having a single measure tell you what you really need to know is very slim because most aspects of performance are fairly complicated. You might need multiple measures to track them.

So analytic metrics or index measures are harder to manipulate. They are more likely to give you a real view of what’s going on, and it still allows you to have a few key metrics because you start out with a few key summary gauges at the top, and then if those are yellow or red, then you can drill down and look into the details of what’s underneath it.

View a 2-minute demo of InetSoft's easy, agile, and robust BI software.

Some personal examples of analytic metrics that we’re familiar with is we all know something about our credit score. Most of us have no idea what the exact formula is but we know that it’s some number 400 and 800 and that the bankers use this as a way of measuring the amount of risk in giving someone a loan, and we know that certain things cause it to go up and down. If you have a credit card with $5,000 limit, you haven’t used it for two years, and you cancel the card, your credit score actually goes down which is counterintuitive. You’d think it would go up, but you’re getting rid of a line of credit. So, that’s a much better measure than just looking at one number, like your assets divided by your liabilities.

Another example in your personal life is a website called that gives you your physical age versus your chronological age, and it asks you a whole lot of questions about your family, your genetic history, your current health stats; you enter your blood pressure and your triglycerides and your weight, and then it asks a bunch of lifestyle questions about diet, exercise, sleep and so forth and it gives you this overall number. This number is much more reliable as a predictor of your longevity and health than simply looking at your cholesterol or your waist size or any individual number. So the idea is an index gives you a much more accurate reading of what’s going on without having hundreds of metrics that you have to look at.

So if I saw that my real age was five years older than my birthday’s, I’d have to drill into the data to find out what’s going wrong and what I should do about it, so that’s the concept, is you start with a high level summary gauge and then you have the intelligence and the drilldowns underneath it to be able to analyze what’s going on.

Most organizations are not that sophisticated, and many companies will admit that their scorecards are still a work in progress. They feel that they still have a lot of work to do on their measures. Some pretty big, well run companies struggle with this stuff. So everybody struggles with this stuff, and this is very hard to do well. As soon as you think you got your metrics figured out, something changes, and you need new ones or need to delete the old ones.

What I find is that typically the strategic measures are limited to two to four on your scorecard. If 15 or 20 is the total number, then two to four of them are probably strategic in focus. That may change if your organization is going through a big upheaval. In that case, half of their metrics might be strategic in focus, but in a typical company where it’s business as usual, and we just want to grow a little bit, then two to four is probably okay. The rest of them talk about what are you doing to keep the lights on; performing your mission, making your products or whatever you do for a living.

Most organizations care about three broad things when it comes to their people so these might make up a good starter list for the people measures on your dashboard. First of all, most companies want to know whether people get up in the morning and dread coming to work or enjoy coming to work. So some measure of employee engagement or satisfaction is probably pretty important, but doing that with an annual survey is also a big mistake, so you have to figure out how you measure it more frequently. If you survey people more often you’re going to make their satisfaction go down just because you’re bothering them with stupid surveys when they’ve got work to do.

Another thing you want to do is probably measure safety and health. Manufacturing companies typically have pretty good safety measures, but most of them are heart attack measures. If somebody is going to get hurt, put it down on a chart. So you need some predictive measures, too, such as safety audit scores or behavioral measures.

More and more companies are starting to measure the health of their employees. It costs them money, so they want to encourage their employees to be healthy. Finally, I think you want to know about whether you have the right people with the right skills. You might have 50 different measures of intellectual capital. So you might try to take those 50 different dimensions and roll them up into one or two indexes that help tell them whether or not they have the right people with the right skills.

Read why choosing InetSoft's cloud-flexible BI provides advantages over other BI options.