The secret is out, and has been for a while: In order to remain competitive, businesses of all sizes, from startup to enterprise, need business intelligence (BI).
“Business intelligence (BI) is an umbrella term that includes the applications, infrastructure and tools, and best practices that enable access to and analysis of information to improve and optimize decisions and performance.”
But what do you do with all this business intelligence? You can have the most robust BI infrastructure in place. However, if the underlying information isn’t easy to access, analyze or understand, it is pointless. This is where the power of business dashboards comes into play. Dashboards often are the best way to gain insight into an organization and its various departments, operations and performance. Well-built, focused dashboards easily serve up summaries and reports of the BI that’s most critical to the organization.
But First, What Is A Dashboard?
A car dashboard instantaneously identifies and provides feedback regarding the status of the automobile: speed, servicing needs, tire pressure, fuel level, etc. Business Intelligence dashboards do the same thing, only much more. Through dashboards, organizations can quickly identify current and historical performance. Organizations can also further utilize the data to define metrics and set goals. By integrating these Key Performance Indicators (KPIs) and goals into their dashboards, companies can proactively identify issues, minimize costs and strive to exceed performance expectations. In the recent years, dashboards have been used and implemented by many different industries, from healthcare, HR, marketing, sales, logistics, or IT, all of which have experienced the importance of dashboard implementation as a way to reduce cost and increase the productiveness of their respected business. It doesn’t matter from which business you’re coming from or how big your company is, you always want effective results and clear actions to be taken after an issue is discovered. Let’s explain that with a dashboard example.
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The sales performance dashboard above is a one-stop-shop for sales insights. The dashboard provides the perfect overview of the progress of the sales department by focusing on various sales KPIs: sales growth, sales targets, average revenue per unit (ARPU), customer acquisition cost (CAC) and customer lifetime value (CLV).
At a glance, sales managers can see whether or not their team is meeting their individual goals. Managers can also see if the team as a whole is reaching its goals. The value this brings to the business is significant. Once companies gain regular insights into their KPIs, they see deeper into their data and generate actionable insight.
This type of analysis is not feasible with traditional paper reports and spreadsheet tools. The traditional types of reporting don’t meet the requirements of today’s data management nor can they produce efficiency like an interactive dashboard where sets of data are presented in a complementary way. An effective dashboard combines information dynamically to measure performance and drive business strategy. That interactivity is indeed what drives a profitable result by visually depict important data which can be accessed by different departments. Cloud-based, real-time data visualization software enables fast, data-driven action by decision makers.
Digital age needs digital data.
Benefits Of A Successful Dashboard Implementation
So, you are now sold on the power of dashboards. Before you run off to the dashboard printing presses, we mean data visualization software, let’s talk about using the right ways to build and use dashboards. It is always best to start off with the right plan and implement dashboard design principles that will take into account the most relevant data of your company. A successful dashboard implementation will:
- Save time across an organization: IT, analysts, managers, C-suite, etc.
- Save companies money by highlighting unnecessary operational costs
- Provide insight into customer behavior
- Effectively align strategy with tactics
- Ensure a goal-driven and performance-based data culture
- Encourages interactivity and analysis
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An ineffective dashboard implementation doesn’t maximize these dashboard benefits and can quickly derail any data-driven culture. Have no fear! Read on to see how you can easily avoid dashboard fatigue at your organization.
There are 2 most important parameters to keep in mind when implementing a dashboard:
- Don’t “data puke”
- Choose the right type of dashboard
Avinash Kaushik, Co-Founder of Market Motive and Digital Marketing Evangelist for Google, has great insight into some of the ways dashboards fail. He has also come up with some rules for creating powerful dashboards. Kaushik’s biggest, and most entertaining, rule is “don’t data puke.” It is important to remember that dashboards are not just reports. Make sure your dashboards include insights, recommendations for actions and business impact. It also needs to deliver context! You don’t want executives and whoever else ends up with you dashboard making their own interpretations of the data. A dashboard should tell a clear enough data story where interpretation is unnecessary. Also remember, when it comes to KPIs, segments and your recommendations, make sure to cover the end-to-end acquisition, behavior, and outcomes.
Kaushik drives his rules home by stating “This will be controversial, but let me say it anyway. The primary purpose of a dashboard is not to inform, and it is not to educate. The primary purpose is to drive action!”
What is Your Dashboard Type?
There is another important factor to a dashboard’s success, besides avoiding “data puke.” It is as simple as choosing the right type of dashboard.
In this data-driven world, there are many dashboard types that are changing the way a successful business intelligence strategy is conducted. That means that although you can have a healthy approach to your business development, if you don’t communicate the right sets of data to the right people in your company, the long-term success can be jeopardized and costly. This is why choosing the right type of dashboard can bring lasting and cost-effective results.
What Problems Are You Trying to Solve?
Is your dashboard analytical or operational? Determining which overarching category your dashboard sits in is the first order of business.
Operational dashboards look at current performance related to your KPIs. They help organizations understand, in real time, if its performance is on target. They are often used across various levels of an organization.
Analytical dashboards help organizations establish targets based on insights into historical data. They are often complex: utilizing complex models and what-if statements. Analytical dashboard’s ownership usually falls on business analysts/experts.
When discussing dashboard “types,” it is easy to get caught up in a game of semantics. Of course, there is overlap between the two genres and dashboard naming conventions are evolving with the field. The important thing is that you identify what questions you are trying to answer before you build a dashboard.
So What Types Of Dashboards Work Best For You?
Now that we have separated the dashboards into two large categories, let’s dig deeper. There are four general subtypes of dashboards:
Yes, with our current hierarchy you can have an operational-operational dashboard. We told you we could get into some dashboard semantics. Each of these dashboard types comes with different requirements for the level of summary, analytic capabilities, and user interfaces.
What Is A Strategic Dashboard?
A strategic dashboard is a reporting tool for monitoring the long-term company strategy with the help of critical success factors. They’re usually complex in their creation, provide an enterprise-wide impact to a business and are mainly used by senior level management.
Strategic dashboards are commonly used in a wide range of business types while aligning a company’s strategic goals. They track performance metrics against enterprise-wide strategic goals. As a result, these dashboards tend to summarize performance over set time frames: past month, quarter or year. When the strategic dashboard is properly developed, designed and implemented, it can effectively reduce the amount of time needed to accomplish a specific business key performance indicator, while reducing operational costs. That way these dashboards can provide senior teams a clear picture on strategic issues, and therefore, grant them the opportunity to accomplish a specific course of action.
Although they can provide opportunities for specific departments’ operations and further analysis, strategic dashboards are usually fairly high-level. As mentioned, senior members of a team can identify strategic concerns fairly quickly and provide comprehensive strategic reports with the analyzed data. The importance lies in analyzing management processes, using common qualitative and quantitative language, and identifying a specific system, which has to be incorporated into the dashboard so that every decision-maker understands the presented data. Let’s see this through a specific dashboard example.
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This management dashboard above is one of the best strategic dashboard examples that could easily be displayed in a board meeting. It isn’t cluttered, but it quickly tells a cohesive data story. The dashboard focuses on revenue in total as well as at the customer level plus the cost of acquiring new customers. The dashboard is set to a specific time frame: Q1 of 2016. It includes significant KPIs: customer acquisition costs, customer lifetime value, and sales target. This dashboard answers the following: What is my customer base and revenue compared to this time last year? While addressing specific values, incorporating specific key performance indicators and using a common qualitative and qualitative language, this dashboard represents the management board clear value and specific course of action, while using comparison metrics and analysis.
What Is An Operational Dashboard?
Operational dashboards are one of the types of dashboards used for monitoring and managing operations that have a shorter time horizon. Since they focus on tracking operational processes, they’re usually administrated by junior levels of management.
Their value in today’s digital age lies in the fact that businesses start to realize the importance of fast and correct data between operational teams and departments. While the unprecedented developments in the field of dashboard reporting and analysis have made operational undertakings quite simplified, operational managers can also greatly profit from using these kinds of dashboards, and visually and interactively point to a real-time data issue that has to be swiftly addressed.
These kind of dashboards are arguably the most common dashboard. They are mostly used for monitoring and analyzing a company’s activities in a given business area. These dashboards are usually focused on exception alerting and are based on real-time data. Operational metrics dashboards usually end up in the hands of the subject matter experts. This often leads to more direct action, then further analysis. Because of this, operational dashboards often are more detailed than strategic dashboards. They can also provide operational reports with a more detailed view of specific data sets.
Operational dashboards help departments stay proactive and ahead of problems. For example, a manufacturing firm may use an operational dashboard to track products manufactured along with the number of defects, complaints or returns. With a dashboard, any problematic changes would be highlighted in real time.
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The marketing performance dashboard above is one of our many operational dashboard examples. It shows the performance of three campaigns over the past 12 weeks. It provides important operational information and key performance indicators for the marketing team on cost per acquisition, the total number of clicks, total acquisitions gained, and the total amount spent in the specific campaign. Any significant changes would immediately alert the marketing team. Why is it useful? Because a fast-paced marketing department or agency can adjust their operational activities based on real-time data and teams don’t have to wait for extensive, traditional reports and analysis presented in a spreadsheet.
What Is An Analytical Dashboard?
An analytical dashboard is a type of dashboard that contains a vast amount of data created and used by analysts to provide support to executives. They supply a business with comprehensive overview of data, with middle management being a crucial part of its usage.
Like mentioned earlier, the importance of analytical dashboard lies within their impact on historical data usage, where analysts can identify trends, compare them with multiple variables and create predictions, and targets, which can be implemented in the business intelligence strategy of a company. They are often useful when complex categorized information is massive and broad, and need a visualization to perform a clear analysis of generated data.
The analytical dashboard can also be found in the intersection of the strategical and operational dashboard. They consist of different modules that can bring a positive effect to the performance of a business if used correctly.
In the example below, the analysis of the financial performance dashboard can help decision makers to see how efficiently the company’s capital is being spent and to establish a specific operational task to structure future decision better.
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What Is A Tactical Dashboard?
A tactical dashboard is utilized in the analysis and monitoring of processes conducted by mid-level management, emphasizing the analysis. Then an organization effectively tracks performance of a company’s goal and delivers analytic recommendations for future strategies.
Tactical dashboards are often the most analytical dashboards. They are great for monitoring the processes that support the organization’s strategic initiatives. Tactical dashboards help guide users through the decision process. They capitalize on the interactive nature of dashboards by providing users the ability to explore the data.
The detail level of a tactical dashboard falls between the strategic and operational dashboards. A tactical sales dashboard can track your sales target (actual revenue vs. forecasted revenue). It allows for various filters and segmentation, including region, sales manager and product. An operational dashboard would alternately track sales of these specific products against their competitors at different times throughout the year. As they are a bit higher level, tactical dashboards also tend to include more data visualization than operational dashboards. Let’s see this through an example in project management.
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The example above shows a detailed overview of a project with specific timelines and efficiency of the parties involved. You can define specific risks, see the overall progress and average times of conducting specific tasks. After the project is finished, you can evaluate the results and make future projects more successful.
Now You Can Get to Dashboard Building!
By knowing the difference between the dashboard types, you can ensure you are presenting the right information to the right people, at the right time and using great data visualization types. While still stressing that you should always know what you are building, sometimes your strategic dashboards may seem a bit tactical, and tactical dashboards a bit operational. Don’t worry about it. Self-service analytics give you the opportunity to best fit dashboards to your needs.
To summarize our detailed dashboard types presented in this article, here are the most important ones you should consider when building your strategy.
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If you’re ready to start building your first dashboard completely free, then our 14-day trial can provide you with a perfect solution!