There are several variants for the definition of dashboards, but I would like to start with the one proposed by Stephen Few some time ago:"A dashboard is a visual display of the most important information needed to achieve one or more objectives, consolidated and arranged on a single screen so the information can be monitored at a glance."1

Information in a dashboard is presented using familiar images and concepts, such as stoplights, charts and dials, that give meaning and context to the underlying data (Are we on, above or below our sales targets? How fast is revenue growing?).

The concept of the dashboard is taken from the car dashboard, which provides critical information about the operations of the car, allowing the driver to make the right decisions related to driving the car, such as to accelerate or decelerate, or to stop for gas. Similarly, an effective business intelligence dashboard quickly conveys to a user the state of a business or business unit (monitor), providing the user with actionable information (manage). The information must be presented at a high-enough level to be immediately relevant and appealing to the target audience, be it executive management, sales, or customer service. The state of a business is represented by a set of specific metrics, or key performance indicators (KPIs). As part of performance management strategies, business users establish a goal for each KPI and monitor the KPI value relative to the goal.

For example, one possible KPI for a customer service call center may be the average time a customer waits for his or her call to be answered by a representative. The desired goal may be a customer wait time of less than 60 seconds. The current average wait time compared with the goal can be shown on a dial with values between 0 and 120 seconds. Values above the goal of 60 are coded in red, values between 45 and 60 are coded in yellow, and values between 0 and 45 are coded in green. The color-coded background provides users with an immediate picture of the Customer Service performance relative to the specified goal. A second indicator in a customer service dashboard may show the directional trend of customer wait time - whether it is increasing, or decreasing.

In the business intelligence (BI) world, the unit of work is a report. Metrics or KPIs are encapsulated in the reports, and several reports make up a dashboard. For example, an executive dashboard for a retail chain may include in one view a graphical representation of the following reports:

  • Best and worst performing stores
  • Revenue of the last week versus the average of the prior 52 weeks, and
  • Impact of a promotion in one region versus the average in that region in the prior month

Who Needs Dashboards?

Traditionally, dashboards have been directed toward managers and executives, who need a high-level view of business performance through financial and operational data.

As BI penetrates the front line of businesses, the users and content of dashboards change. Business performance components are now being monitored by front-line employees as well as managers. Instead of the high-level business metrics of executive dashboards, operational dashboards look at operational data. For example, an IT dashboard may look at indicators such as service uptime, average response times, throughput, and peak system usage times. A marketing dashboard may contain the success rate of the latest email campaign, the success rate trend of the last five campaigns, cost of gaining a new customer and customer turnover rate.

In short, any information consumer in any organization that monitors and manages performance is a potential user of dashboards.

What are the Options?

While custom-built dashboards have been part of large-scale implementations at big companies for some time now, dashboards have in recent years become common in companies of any size, in all business functions, and at all levels of operation. This propagation of use has been driven by the explosion and availability of data and the availability of easy-to-use reporting technologies.

Many software applications now include dashboards that help users manage the operations supported by the software application. For example, salesforce.com allows users to create sales dashboards using the information captured by salesforce.com, and SAP provides the SAP Plan Manager Dashboard that displays information captured by the SAP manufacturing modules.

BI tools take a more generic approach, allowing users to build dashboards that display the information in any system and combine information from different sources. Examples of BI tools that provide robust generic dashboard capabilities are:

  • MicroStrategy 8 - allows users to design dashboards in a format optimized for quick absorption, using a combination of tables, graphics, gauges, dials and other graphical indicators, as well as conditional formatting, free-form labels, borders and background colors. Organizations can leverage all enterprise data and reach all individuals across the enterprise.
  • BusinessObjects Dashboard Manager - delivers management dashboards, scorecards and alerting capabilities. It helps to create management dashboards that support common management methodologies; for example, organizations using Six Sigma can easily add control charts to their dashboards to track if key indicators remain within established tolerances. Recently, Business Objects added Crystal Xcelsius - a visual tool for interactive "what-if" analysis - into its dashboard product.
  • Cognos 8 Business Intelligence - includes a dashboard component that also translates information from various corporate systems into visually rich presentations using gauges, maps, charts and other graphical elements.

Benefits of Dashboards

More and more organizations are turning to dashboards to help them understand and manage their performance. The benefits are many. At a tactical level these include:

  • Ability of business users to reach and consolidate relevant data from one or multiple sources
  • Organization and presentation of information in a way that can be absorbed immediately by business users, and
  • Effective and standard formatting of business reports.

At a more strategic level, these benefits result in:

  • Effective monitoring of business operations
  • Effective communication of information
  • Effective sharing of information, and
  • Better decision-making processes.

Dashboards are commonly used in conjunction with broader performance management initiatives and approaches, such as balanced scorecards. In this capacity, dashboards can serve as a focal point for important information to be conveyed across large constituencies to achieve shared understanding and buy-in.

Implementation Pitfalls

Like many other projects, dashboard projects involve pitfalls. Following is a summary:

  • Data accuracy: The data displayed has to be absolutely correct. If users cannot trust the data, they will not use it. Nothing will kill the use of a dashboard faster than incorrect data.
  • Target audience: Different users in an organization will need different information, aggregated at different levels. Dashboards should be targeted at specific users and developed according to their needs. Involvement of the end users in a dashboard project will greatly improve the adoption rate of the final product.
  • Using the right indicators (metrics, KPIs): For each goal or area to monitor, appropriate indicators need to be developed. The metrics and/or KPIs developed should be measurable and aligned with the organization's business goals.
  • Context: Without the appropriate context, the measured indicators are nothing more than numbers. Forecasted, high and low values, variances and/or trends are examples of additional information that provides an immediate grasp of the meaning of the indicator value.
  • Visual delivery: Dashboards must convey a large amount of information quickly in a way that is compelling and intuitive. Arrangement and location of information, as well as graphics are very important in the final product.
  • Navigation: Although dashboards generally display high-level summary information, they can be designed to allow users to drill down to detailed information. If this is enabled, the paths, along which users can drill down, should be logical and intuitively useful. Drilling down to meaningless or illogical data must be prevented.

Many factors contribute to the increased adoption of dashboards in different areas of the organization. Realizing the full benefits that dashboards can bring to organizations takes more that good intentions and a box of software. Having the right data, using the right tools, and following the right implementation approach can help organizations achieve their vision.
Reference:

1. Stephen Few. "Dashboard Design: Taking a Metaphor Too Far." DM Review, March 2005.

Raul Gonzalez is an associate manager with Claraview Inc., a business intelligence (BI) strategy and technology consultancy. He can be reached at raul.gonzalez@claraview.com.

This article originally appeared on DMReview.com.

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