6 Tips for Setting up Business Dashboard Metrics
An effective business dashboard provides management with key performance information. It should be clear and to the point so that users can easily decode and gather key indicators that they can use in decision making. A well-conceived dashboard improves decision making, reduces inefficiencies and improves the bottom line.
People have different opinions about what a dashboard is and the purpose it serves. The word “dashboard” is borrowed from the automobile industry. A car’s dashboard has a number of gauges and displays that provide the driver with key information about the performance of the vehicle. So, you have pressure gauges, fuel gauges, heat gauges, revolution counters, gear change indicators, head lamp indicators and a few more. All these tell the driver the most important stuff they need to know about the car at any given moment. In the same breadth, a business dashboard is supposed to provide a manager with information on key performance indicators (KPIs). For example, a marketing dashboard will have information on leads generated and sales conversion in addition to other key marketing data.
Types of Dashboards
Broadly speaking, there are two types of dashboards. A dashboard can either be operational or analytical. The dashboard you choose depends on the particular needs of your business.
An operational dashboard is short-term in nature. It summarizes the progress of short term objectives such as the effect of sales activations, promotional campaigns or an advertising campaign. It is intended to be consumed by middle management and workers reporting to middle management.
Analytical dashboards on the other hand are more long-term. They provide senior management with an overall picture of the business and allow them to see the progress towards attainment of long-term goals and organizational vision.
However, a dashboard can be a hybrid of the two once again depending on the needs of your organization. So, the idea is to identify why you need the dashboard so that the targeted consumers get the most out of it.
The following six points will guide you when setting up your business dashboard so as to get the most benefits.
1. Important Metrics Only
A metric should only be included on the dashboard if it’s important to users. Also, only include the most relevant detail about the metric. Ask yourself what the users want to know and how much of the information they need to know can reasonably be presented on the dashboard. Users will only use a dashboard if the metrics are important and relevant to them.
2. Metrics Must Be Actionable
The main purpose of a dashboard is to help with timely decision making. To do this, the metrics included must be actionable. Actionable information is information you can do something about. For example, a marketing dashboard could show that a specific channel, say Facebook, is not delivering any conversions over the last month. That is actionable information because a marketing manager can take action by reducing ad spend on Facebook, tweaking the ads or dropping the channel altogether. Contrast this with a report that shows ad spend per channel. It is useful information but not necessarily actionable.
3. Metrics Should Be Updated Regularly
The true power of dashboards can only be realized when the data is reported in real-time. Thus, your dashboard should be plugged directly into business systems so that it is updated automatically.
4. Keep Fancy Formatting to a Minimum
Avoid using lots of colors and different types of graphs and charts. Pick one color theme and run with it. The same goes for graphs and charts. Don’t use complex graphics when a simple one will suffice. The idea is to communicate the information in the most precise way. It’s not a graphic design contest.
5. Providing Supporting Metrics
Some users will want to drill down further after seeing the bigger picture. Make this possible by creating an interactive dashboard. Once the user has seen the overview, they should be able to tap or click and see the supporting metrics.
6. Make Sure the Goals are Known
As already mentioned, dashboards can be analytical or operational. Whichever type your dashboard is, it will not be of much use if the users do not know the operational or strategic goals. Making sure everyone knows what the goals are will make them appreciate the power of the dashboard in letting them know their progress towards achievement at any point in time.
There are many commercial dashboards that do a very good job of presenting your key performance metrics. They will do all the heavy lifting for you once you plug in your data.