Measurement Madness: Recognizing and Avoiding the Pitfalls of Performance Measurement

Chapter 3Measurement for Measurement's Sake

As you write your end-of-month reports based on data collected through multiple indicators, do you ever stop and consider the reasons for that measurement, or what happens to your reports once they get sent off into what often seems like a black hole? The proliferation of data has exploded in recent years. A recent Harvard Business Review¹ article stated that 2.5 exabytes of data are created each day, and more data is sent across the Internet every second than was ever even stored 20 years ago. The likes of Walmart collect more than 2.5 petabytes (2.5 quadrillion bytes) of data every hour from their customers. To get a feel for what these numbers mean, consider that a million seconds is 11.5 days, a billion seconds is 32 years and 2.5 quadrillion seconds is 80 million years!

“Big Data” is certainly changing the way organizations operate, and our capacity to do planning, budgeting and forecasting, as well as the management of our processes and supply chains, has radically improved. However, greater availability of data is also being accompanied by two major challenges: firstly, many managers are now required to develop data-oriented management systems to make sense of the phenomenal amount of data their organizations and their main partners are producing.² Secondly, whilst the volume of data that we now have access to is certainly seductive and potentially very useful, it can also be overwhelming, just as in the case of Mike's firm. ...