What is a Performance Dashboard?
A performance dashboard is a data visualization tool that provides users with the ability to measure, manage, and monitor the processes and activities within a business, to help individuals and management work towards business goals.
A performance dashboard is also referred to as an analytical application, portal, business intelligence tool (BI tool), or performance management system. The information contained in the performance dashboard helps users to go deeper into business performance through drill down into specific measurements and helps with developing targeted strategies that bolster continual growth.
Performance Dashboard as a Tool for Organizational Change
A performance board can be compared to a magnifying glass. Organizations have multiple departments, divisions, and or units, each with unique strategies, applications, processes, systems, and products. Sometimes, the activities and operations in these sections of a business are redundant and conflicting. To avoid or even overcome these elements of chaos, a business may require an organizational magnifying glass for management to look at specific aspects in great detail.
A performance dashboard focuses on all operations of a business to ensure that everyone moves in the same direction but allows that magnifying glass to be applied to departments, processes, or individuals. There are clear measurables set, with goals and strategies clearly presented. This means that employees can see how their tasks and activities help to realize the goals of an organization.
The business world today is characterized by the highly competitive market. To succeed in such a competitive ecosystem requires decision-making based on data-based insights. Lack of vision or not knowing how to achieve goals means the organization is throwing spaghetti on a wall and hoping something sticks. This is a detrimental factor in the growth of a business causing a lot of wasted time, resources, and opportunity.
Therefore, if the goal of a business is to evolve, boost its bottom line, or increase brand awareness, embracing a business performance dashboard should be a top priority.
Undoubtedly, a performance dashboard is a significant agent of organizational change. When used efficiently, a performance dashboard can cause an underperforming business to become a leading organization. It can also be used to focus teams on the fundamental activities or tasks they need to do in order to excel. In addition to showing the organizational goals, the dashboard provides workers, managers, and executives with the appropriate next steps so they know how to progress towards achieving their objectives.
Components of Performance Dashboard
The components of the performance dashboard, also referred to as the ‘three threes’, include three applications, three layers, and three types.
A performance dashboard involves three applications, each performing a specific function. The applications are monitoring, analysis, and management applications.
The monitoring application enables users to monitor performance alongside the metrics aligned with corporate strategy. Monitoring occurs at both the operational and strategic levels. In the former, users monitor the primary process that gear the business towards achieving its day-to-day operations goals for sales and manufacturing, while the latter enables users to monitor the business' progress towards achieving short-term and long-term goals.
Analysis applications allow for the exploration of data from various dimensions and in various hierarchies of an organization. This helps in ascertaining the cause of any exception condition that may have been highlighted in the monitoring layer.
The management application has features that enhance collaboration and decision-making. A majority of performance dashboards are designed to support executive meetings with subordinates. Management applications help the users to annotate pages and charts in discussions as well as explain performance inconsistencies and form an action plan that enables the executive to review or comment on the proposed plan.
A performance dashboard is also made up of three layers of information. Each layer provides additional information to the previous one, enabling the user to understand the underlying problem and identify available solutions. In short, the user can monitor, analyze, and drill down into the information. The three layers of information include graphical metric data, summarized dimensional data, and detailed transactional data.
The graphical metric data is the top-most layer. The layer involves a graphical view of performance metrics that appear in the form of charts and alerts. This layer allows the users to monitor information at a glance.
The summarized dimensional data is the middle layer. The layer contains dimensional data that allows the users to access the data by subject and hierarchy. For example, the middle layer helps the user to identify the customer base through information like geographical location (region, country, or city), and time. In this case, the user can go deeper to view trends and exceptions from any perspective.
The detailed transactional data is the bottom layer, and contains detailed granular data that is usually stored in operational systems of data warehouses. It is this kind of data that the users require to understand an underlying problem such as the decline in sales. Data in this layer is mostly delivered in the form of lists or reports displayed in a separate window.
The three types refer to three types of dashboards, including operational, tactical, and strategic types.
The operational dashboard allows employees to manage and control all processes of the operation using detailed data. Notably, data is refreshed regularly.
Tactical dashboards are used in monitoring and managing a department's projects and processes. For example, business executives use the tactical dashboard to review and set performance targets for groups in the company. Managers, on the other hand, use tactical dashboards to minor and optimize processes in the entire organization.
Strategic dashboards monitor the implementation of strategic objectives. In this case, employees can use the strategic dashboards to review performance and communicate strategy.
Different Types of Business Performance Dashboards
Other than the operational, tactical, and strategic dashboards, there are a range of business performance dashboards. The one used depends on the department it is being used in. They include marketing, financial, employee, sales, support team, content quality, and profit and loss performance dashboards.
Each of these dashboards has its own primary key performance indicators (KPIs). For example, while the key indicators of the marketing performance dashboard may include click-through rate (CTR), cost per acquisition (CPA), or cost per click (CPC), the employee performance dashboard may have performance indicators such as employee productivity, overtime hours, training costs, or absenteeism rate.
The Benefits of Business Performance Dashboards
As organizations grow, they continue to implement performance dashboards because they offer a range of benefits to everyone in the organization, at every level.
Helps in Refinement of the Organizational Strategy
Executives use performance strategy as a driver of the corporate strategy. When an internal issue comes up in an organization, for example, a decline in a month's sales, the executives need to investigate why, and decide if action needs to be taken. They can use the performance dashboard to assess the problem and come up with a long-lasting solution as they move the organization towards achieving its strategic objectives.
Performance dashboards act by translating the corporation’s strategy into initiatives, measures, and targets customized to each group in the organization. Sometimes, the customization occurs down to the level of the individual. It is an essential tool that enables users to get a clear picture of the goals and targets every time they log in to the performance dashboard. Everyone across the entire organization can easily access and understand the strategic objectives and what each individual or a group must do to achieve the goals.
Increases Motivation and Coordination
The publication of performance measures and results encourages friendly competition among groups or individuals within the organization. This kind of competition cultivates employee motivation and productivity. Performance dashboards encourage people to work harder. Motivation and productivity are particularly realizable when compensation is tied to performance.
In addition to motivating employees, performance dashboards encourage employees from different departments to work closely together and to maintain a good working relationship with managers and executives. It is crucial to understand that competition should encourage interdependent working instead of working independently. The bottom line is to move ahead as one to achieve the organizational goals and objectives.
Managers and executives rely on performance dashboards to understand their daily performance and use that data to predict their future performance. This real-time data is used to forecast trends. Forecasting helps an organization to avoid surprises that come with unforeseen problems that might affect short-term and long-term goals.
Deliver Actionable Information
Performance dashboards provide data in a timely fashion. Users can utilize this to formulate plans that address the cause of problems. Managers can drill down in the granular data, uncover the source of the issue, and create an actionable solution that resolves it.
Provides a Single Source of Truth
A performance dashboard is where the current organization rules, definitions, and metrics are stipulated. It becomes the reference point for all actions and decision-making. Essentially, performance dashboards rule out the likelihood of conflict among the workers, managers, and executives as everyone has access to the same information.
Not only do performance dashboards provide a single source of truth for metrics and key performance indicators, but they are also the source of reliable, consistent data. They funnel information from all relevant datasets and sources of data and keep it all in one easy to access location.
An Empowerment Tool for Users
Performance dashboards enable self-service reporting, which eliminates reliance on the information technology department to create custom reports. Through structured navigation paths, layered delivery information, and guided analysis, performance dashboards enable users with or without technical skills to access, analyze, and act on the available data or information. There is no more waiting for analysts to run reports, or back-and-forth trying to ascertain what the user needs.
Cuts Down on Costs and Redundancy
Performance dashboards consolidate and standardize information. Consequently, they eliminate redundant silos of information that may be a problem when creating a single version of business information. A single performance dashboard can be beneficial to an organization to consolidate data warehouses, data marts, and independent reporting systems.
Pitfalls and Solutions of Performance Dashboards
Although there are numerous benefits of performance dashboards, they are not without their challenges.
Performance Dashboards that Are too Complicated for End Users
One of the challenges that may occur in performance dashboards is when they are created without the user in mind. A performance dashboard established without user experience in mind may be too complex for ordinary users, requiring an IT professional or a developer, defeating the purpose of the dashboard altogether. Be wary of using templates as they may contain pre-loaded metrics that are not relevant to every user.
Involved user experience professionals when developing dashboards, plus taking input from the end users, can ensure the dashboard contains relevant metrics, presented in a usable way.
Compatibility and Interface
A dashboard needs to be fully connected with critical business systems to avoid presenting outdated or incorrect information.
When planning the dashboard, the data team must either account for all data sources and ensure compatibility with the system or utilize software for data management and cleansing. Legacy systems may initially require additional attention in order to assure that the data transfer to the dashboard occurs smoothly.
For many organizations, dashboards need to provide insight quickly without delays in response time. Another challenge with dashboards is that they can be slow; as a result they may derail or delay decision-making.
Although various reasons cause slowness or other problems in the dashboard, their performance can be improved through the following practices:
- De-normalization of data tables
- Optimization of dataset to improve the query execution duration
- Elimination of any unwanted data and columns as well as calculated columns
- Minimization of the fetched records. In this case, the user can apply filters to keep the required data only
- Scheduled updates can be utilized to cache data on the server if the dashboard is displayed on the web
- The user can also use uploaded data instead of fetching the data from memory
A Powerful Tool for Organization Growth
Performance dashboards are a powerful tool that can help organizations towards their targets. They do this by setting key performance indicators, ensuring all employees and managers are working towards the same goals, and having the ability to check and see if progress is being made. They can truly power a business up into the next level.
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