Part I – Best Practices for Digital Dashboards – an Operating Executive’s View
Business Intelligence (BI) dashboards can be valuable business tools providing a quick overview of key business metrics. If not implemented judiciously, they can also prove to be a time-consuming exercise providing inaccurate and/or misleading business intelligence.
The difference is how the dashboard is conceived, set-up, and managed. By defining clear objectives, involving key stakeholders, and identifying uniform data sources, your dashboard will provide actionable data to fuel business decisions. This is the first in a two-part series that presents best practices for building effective digital dashboards.
In Part I, we address the following fundamental rules and guiding principles for dashboard development, including
- Defining your process
- Setting a goal
- Identifying dashboard constituents and securing their buy-in
- Validating and confirming key business metrics
- Challenging Convention
- Selecting your dashboard implementation & governance stakeholders
Part II of this whitepaper focuses on best practices for implementation.
The Right Frame of Mind Yields Desired Results
Good BI dashboards require an open mind, thoughtfulness, teamwork, discipline, knowledge of your business and the right tools. The reward, a well-managed successful business, is worth the effort.
Keep in mind, you will look at your dashboard every day; and make decisions that profoundly affect your business based on what you see. You, your team, your peers, your boss and ultimately the entire business will spend countless hours analyzing it, as well as identifying and supplying the data to drive it. Plus, inevitably, decisions affecting the very viability of your enterprise depend on your dashboard’s accuracy and effectiveness delivering critical insight into the health of your business. The bottom line: if your dashboard is off – either in purpose, execution, or accuracy – your company is driving blind. You just don’t know it. If your data is bad, your presentation unclear, or you are tracking the wrong metrics, you are in trouble.
Getting It Right – Rules & Guiding Principles
Define Your Process
At the outset, you need to define your process for creating and implementing your new dashboard; then you need to communicate the process and the importance of the dashboard to all concerned. Without a clear process, coupled with clear communication, your task becomes much more difficult, and you jeopardize the success of your dashboard project. Following are the process steps to drive a successful dashboard project and recommendations on ‘best practices” to make your dashboard project a success, giving your business a valuable new business intelligence tool:
- Set a dashboard goal
- Define dashboard constituents and get buy-in
- Identify critical business metrics
- Select a dashboard team
- Identify data sources and how you’ll access them
- Design your dashboard to present information in the most meaningful and accessible fashion
- Survey the universe of tools available for creating your dashboard and allowing users to generate their own views
- Develop a project schedule and budget for your dashboard project
- Review your project and process with all concerned
Set a Goal
First, you need to set a goal for your dashboard. It may be the single most important thing you do. It doesn’t matter if you are showing available cash, the number of new sales leads, or the number of support calls received on a new product. Everyone needs to be in agreement on the purpose of the dashboard, its relevance to the business, and its level of accuracy. For example, if the goal of your senior management team is not only to document and present enterprise financial results but to look into and plan for the future, then your goal may be to design a reliable tool, driven from secure enterprise financial data, that provides intuitive, interactive ‘what if’ capabilities. Whatever your purpose, be specific, and make certain all your constituents know what the goal is, what the dashboard measures, how accurately, and over what period of time.
This example shows a sales and revenue dashboard incorporating powerful ‘what if’ capabilities. The data comes from the financial system, sourced from ‘Income Statements’. The dashboard displays revenue and expense information and generates income figures. Interactive features like sliders and dials allow dashboard users to adjust a number of financial variables affecting growth rate, revenue and different classes of expenses. Users can quickly adjust different metrics, such as ‘Cost of Goods Sold’ and immediately see what affect an increase or decrease will have on the business. This facilitates a management team’s ability to look at business scenarios, and speeds the intelligence of business decision making.
Define Dashboard Constituents & Get Buy-In
Identify your constituents; make sure they understand their role as constituents and participants in the creation, maintenance and use of the dashboard. Define the individuals who will create, contribute, use, and serve as executive overseers of the dashboard. Let them know how you perceive their role in context of the dashboard and tell them what their rights and responsibilities are in this role. Create a common understanding of constituent roles:
- Owner – owns the dashboard, which means defining its goal, as well as managing the process of creating the dashboard, introducing it to the organization, and maintaining it throughout its lifecycle.
- Implementer – works with the owner to develop and deliver the dashboard. This could be someone in the IT department, an executive, or a contributor in a department.
- Contributor – an individual or group who owns the data or information required to drive the dashboard. For example, a sales vice president or a sales administrator may provide information on closed sales, projected sales, deal size, and revenue.
- User – this could be an individual who uses a dashboard to understand their performance or that of their group; a manager who uses it to evaluate the health of a process, improve programs, or change organizational behavior. This could also be a manager who uses dashboard information to measure individual or group performance for evaluation and compensation purposes.
Know Your Business – Identify Critical Business Metrics
Know your business, know your information needs, know the information needs of your constituents, know the requirements for timeliness, and understand what types of decisions will be based on your dashboard. This is a critical phase in the definition of your dashboard.
It’s important to identify business metrics in conjunction with dashboard constituents, both to get the support you need to create and maintain the dashboard, and to gain support for its relevance as a strategic business tool.
Really analyze what you want to track and measure in your dashboard. Don’t accept what and how the business has measured things historically. Dig in and understand what is really important. For example, is the number of raw sales leads coming into the company a valuable metric, or is it a misleading data point that distracts from a more critical metrics and understanding? The following dashboard depicts the number of leads generated on a monthly basis for a company, breaking out leads sourced from a ‘New Business Development’ team and marketing programs. The chart communicates raw lead numbers, but does not provide insight into the relative value of the leads, cost of acquisition, or likelihood of closure.
The critical view for accurately predicting the sales forecast may include multiple metrics encompassing the development state of qualified prospects, the average time to conversion of prospects at particular development stages, and the revenue opportunity associated with pipeline deals possessing a particular set of characteristics. A window to regional or geographic performance may also provide valuable insight for managing a business, allowing management to account for regional political or economic circumstances in forecasting. The short answer is you must understand what you need to know and test your reasons carefully before you start measuring.
This example of a ‘Sales Pipeline’ dashboard provides a lot of bang for the dashboard buck. At a glance, it provides granular visibility – opportunity-by-opportunity – into the pipeline while simultaneously delivering high-level regional sales information and key financial projections. A user can discern the cost of customer acquisitions, conversion time, the number of qualified deals and their value in the pipeline. Plus, the pipeline maps into a window that calculates projected financial metrics, providing an immediate, at-a-glance, understanding of how the pipeline is projected to impact financial performance. Business critical data can reside throughout the organization. The dashboard is driven from data sourced from a variety of sources including a CRM system and disparate spreadsheets on individual employees’ laptops. It is important to pay close attention to data sources as you define your dashboard.
Select Your Dashboard Team
You’ll need to define a dashboard team that is inclusive of your constituents, or stakeholders. The dashboard team will be the thought-leaders, the evangelists for a new business tool. Their opinion of the dashboard, its efficacy and value will infect the entire organization for good or for ill. You will want to include your IT organization as well as operating organizations like sales, marketing, and finance that will contribute data to the dashboard, or use its results to make decisions managing the business. Plus, be especially mindful to secure representation from individuals and organizations whose performance will be measured using the dashboard. If they are represented in the process, they are much more likely to view it is a useful and fairly conceived tool, rather than something arbitrary and outside of their control. And, therefore they are more likely to support its value throughout the organization.
At the very least, make certain you have a team member representing all constituent groups: owner, implementer, contributor(s), users(s). And, then build your team’s identity by communicating your goals, holding regular team meetings, and defining and tracking project milestones and related metrics.
So now you know what your goal is, you understand who your constituents are, you’ve got your team, and you know what you need to measure and why. It’s time for some elbow grease, getting down to specifics of how you are going to feed and maintain your dashboard.
(To be continued…in Part II Best Practices for Digital Dashboards – an Operating Executive’s View)