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.
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 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. An effective dashboard combines information dynamically to measure performance and drive business strategy. Cloud-based, real time data visualization software enables fast, data-driven action by decision makers.
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, I 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 dashboard plan. 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
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.
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.
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 Dashboard Works Best for You?
Now that we have separated the dashboards into two large categories, let’s dig deeper. There are three general subtypes of dashboards: strategic, operational and tactical. Yes, with our current hierarchy you can have an operational operational dashboard. I 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.
Strategic dashboards are commonly used 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.
Though they can provide opportunities for drill down and further analysis, strategic dashboards are usually fairly high-level.
This management dashboard is a great strategic dashboard example. This dashboard 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?
Operational 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 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.
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.
The marketing performance dashboard above is a great operational dashboard. It shows the performance for three campaigns over the past 12 weeks. Any significant changes would immediately alert the marketing team.
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.
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 the best data visualization type. 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.