What is a KPI Dashboard and How to Create Oneposted on 20-3-16-Mon 15:58
|What is Actually a KPI Dashboard?|
|How to Create a KPI Dashboard?|
|KPI Dashboard Types|
|How to Choose KPI Dashboard Software|
|KPI Dashboard Examples|
Even with the right key performance indicators, managing business is not quite so easy, especially if your KPIs aren't well organized, don't provide precise extracted data, and aren't easily accessible for your employees at different ranks. Wouldn't it be more comfortable if you don't have to switch from numerous spreadsheets to monitor all of your reports, and data analysis would be indeed more straightforward? Luckily, there are KPI dashboards that will make your performance management a lot smoother and more productive. Key performance indicators dashboard will ultimately help you to communicate with the insights from key performance indicators, and deliver them to the right people on the way they will understand and make better decisions for business' development and success. This Dashboard will give you a better insight into the day-to-day processes and outputs of your company as well as the possible obstacles and issues, in order to act before they occur and affect the business performance.
What is Actually a KPI Dashboard?
The KPI dashboard is a simplified data visualization display that will instantly provide you with the crucial information needed to help you manage and achieve your business key objectives. Key performance indicators dashboard is often known as data or business dashboard. They typically contain graphs and charts that compress large volumes of data into easy to understand visual representations.
When you are traveling in your vehicle, a single glimpse at the Dashboard will show you insights on whether you'll manage to get to your destination on time. The Dashboard will show you how fast you're traveling, do you have enough fuel to drive to your destination, is the engine operating well, etc. When you see the potential problems on this Dashboard, you will be able to solve them before they stop you from getting on your desired destination. Warning lights on the car's Dashboard will turn red when there is a sign of trouble, and the key performance indicators dashboard does the same thing for your business!
Another illustration for a better understanding of what KPI dashboard is, is comparing the Dashboard with the human body. There are over 30 trillion cells, each operating its own tasks, but they all are perfectly coordinated, allowing us to be healthy and alive, which is the ultimate goal. All of these tasks that cells are performing are managed, influenced, and tracked with our brain. The brain needs to be aware of all the processes and its performance so that it can act accordingly. The same goes for your business. Dozens or hundreds of processes regularly influence all performances, and if you want to have a clear real-time insight and an overview of every department's performance, the KPI Dashboard is a great way to do it.
A KPI Dashboard collects, organizes, and visualizes the company's crucial metrics in order to provide a quick, precise, and concise insight of business performances and its development towards the company's long term goals.
An excellent key performance dashboard shouldn't be crowded with too many details. It should decipher the crucial information from other irrelevant data giving to the decision-makers easier access to the most critical indicators of the business' performances. KPI dashboards are the best operational and strategic tools for tracking everyday processes in order for leaders to react even before the actual problem occurs and affects performance.
For example, the KPI dashboard will show you the number of calls, the average waiting time on hold, and so on. A strategic dashboard will look to the future and seek to determine possible obstacles that can appear on the way to achieving a company's strategic goals.
How to Create a KPI Dashboard?
Creating a KPI dashboard is a process that requires a bit of thinking. It's great that you were able to define what key performance indicators you want to track, but now it's time for you to create a personal dashboard, and that's a whole different thing.
Many leaders and managers think that they can just jump right into the building phase by easily choosing the dashboard software. Regardless if you are creating your KPI dashboard in Excel or with the software, you will need to think first and do a few things that aren't actually related to your computer.
Before you start thinking about the key performance indicators and the Dashboard, consider who is going to use it and why. Even if you create the perfect KPIs and Dashboard, if no one looks or cares about it, it will not improve the performance of your company. As it most commonly goes with technology, the human element possesses the biggest obstacles.
Define Your Key Performance Indicators
If you already haven't done this, it's the first step towards creating the KPI dashboard. Without the right set of KPIs, the whole process of tracking your business performance is useless.
The right KPIs are linked to your business objectives and are created to provide an insight into how your business is moving towards achieving long-term company goals. The main word in KPI is "key" because every KPI should be connected to a specific business goal with a performance measure. People often confuse KPIs with business metrics. Even though they are used in the same spirit, KPIs and metrics aren't the same things. Key performance indicators are defined according to the core business objectives. It can be pretty tricky to determine the right KPI. Follow the next steps with examples and get a better understanding of how to create KPIs for your company:
- What is your desired business goal? ( To increase the sales revenue by 30% this year )
- Why is this goal important? ( Achieving this goal will make business more profitable)
- How are you going to measure improvement? ( Progress will be measured as a rise in revenue measured in dollars spent )
- How can you influence the outcome? ( By promoting existing customers to buy more goods, hiring the additional employees, etc .)
- Who is responsible for the result? ( The Chief Sales Officer )
- How will you identify if you've achieved your outcome? ( By increased percentage of revenue for this year )
- How often will you track the progress towards the desired goal? ( On the monthly basis )
Defining KPIs is about matching business objectives to internal processes. There are many KPIs examples you could find that would be useful for your business, but try asking yourself tough questions about your business, that way, you will be able to determine your KPIs a lot easier.
It would be best if you talked to stakeholders, executives, managers, and all other employees, so they tell you what is essential for them to at that precise position. Asking for input is the first step in drumming up your buy-in for a KPI dashboard.
Discuss With Stakeholders
It's essential that you are in-tune with your audience! KPI dashboard is just another way of communication, like e-mail, or presentations. Devote some time for understanding whom you're building the Dashboard for, and soon after, you will have an answer to your question of why you are making the Dashboard. Every employee, depending on its ranking, will have very different data requirements. Most probably, executives will be more for a reporting dashboard while managers will lean towards the operational Dashboard.
Don't avoid this step because every minute you spend consulting with stakeholders, will save your time spent on creating the Dashboard, and it will improve the appropriation of the end product.
Sketch Your Dashboard's Design
Simply try imagining how it would look like. Try sketching on the piece of paper, the most important KPIs you would want to track.
Designing your Dashboard isn't quite so easy, and it can be very challenging because the most effective visualization isn't always the obvious one. While you are communicating with stakeholders and collecting the right KPIs, the ideal idea can appear from nowhere as you will start visualizing the possible design. By creating a low-fidelity model of your Dashboard and then analyzing it with stakeholders, you'll get an immediate sense of the influence of the Dashboard. Your design should include charts, tables, and bullet charts, but don't add too much, as the Dashboard needs to be clear and concise, so even the new employees can understand them and use them properly.
Select KPI Dashboard Software
You can create your Dashboard in Excel, but it would be a lot easier and better organized if you use some of the softwares available. There are many other advantages to why you should choose the software, but the most critical feature is the automatic data update. With the Excel dashboard, you would have to do it manually, and that takes too much time!
If you want to use a tool for creating your Dashboard, consider a few factors so you can determine which software is the best solution for your company:
- Time to deploy
- Capability to connect to data services
- Self-service vs. managed dashboard services
- Ability to publish dashboards via multiple channels
- Client management (if you're building for your customers)
KPI dashboard created and manipulated with the software will save your time and effort.
Gather Your Key Data Points
Collecting all of your data will require going to various services, working with your operations team to craft some SQL queries, and even using APIs (Application Programming Interfaces) to automate data retrieval.
Every key performance indicator you track will have at least one information source originating from a particular system. You will need to devote some time and effort, create a spreadsheet, and map out the data picture behind your essential KPIs. Building data sources won't be easy, and this is probably the toughest part of building your KPIs dashboard.
APIs can be very challenging, especially for non-technical users, so consider using professional help that most software vendors are offering.
Create Your Data Visualizations
The most efficient KPI dashboards are almost always simple and concise. Try not to overload your Dashboard with all the KPIs ever known, instead try using only the ones that are essential to your business development.
KPI dashboard isn't only a data analysis tool, and it's a place to ask and answer questions about business performance towards the company's goals. The Dashboard should be informative and lean towards monitoring and tracking your KPIs.
Regarding Dashboard's design, use this few tricks to create a practical and easy-to-understand dashboard:
- Don't build a one-size-fits-all dashboard
- Add comparison rates wherever possible.
- Avoid pie charts
- Use as fewer colors as you can
- Plan the orientation and arrangement of visualizations
Set a Feedback Session
Now it's time to discuss your Dashboard with the stakeholders. Communication is vital, and even if your KPIs dashboard is excellent, you will probably have to upgrade something or change it, especially after the review process with your employees. Don't be discouraged if people in your company are giving you suggestions even if they're about changing something, that is actually a great thing! This practically means employees adopted the Dashboard, and they are actually going to use it! Dashboards that become a daily task are much more likely to succeed. Even if you feel puzzled and overwhelmed with the feedback and ideas provided, don't despair! This means your team is interested in the Dashboard you built and put so much effort into it.
Deploy Your KPI Dashboard
With this step, you can finally show off your hard work! If your company has wall-mounted TVs, that is a perfect spot for displaying the Dashboard. By doing this, you will encourage communication, adoption, and discussion about the KPI dashboard. There are also other ways you can expand the audience of your Dashboard! If you are using the software tool, many vendors have various distribution options like:
- E-mail updates and snapshot capabilities
- Published links to the Dashboard
- Giving direct access to the Dashboard itself
- And many more.
KPI Dashboard Types
KPI dashboards are created to cover three principal perspectives on business performance tracking. A company or business can use one or all three types of dashboards, and each is meant for a particular purpose:
These dashboards are used for an overall overview of the business, company, or organization. Strategic dashboards mainly contain financial and process-based KPIs, and they are excellent tools for tracking the development of your business.
According to the overview of the company, leaders can make strategic decisions and point out the opportunities and obstacles to key individuals.
Operational dashboards interpret large amounts of data in real-time, from various sources into single and understandable visualization on your Dashboard. Leaders and employees use this real-time data access to make decisions that will improve the performance of the company. For industries like Manufacturing and Construction, and departments such as Marketing use operational dashboards as a requisite part of their everyday processes.
This Dashboard is mainly used for the data analysis, as its name says. The analytical Dashboard allows you to have a further insight into your data so you can find possible irregularities and any changes in the data to determine the root cause. This KPI dashboard offers a comparison of performances and trends using historical data.
How to Choose KPI Dashboard Software
When you're choosing the right software program for your business dashboard, there are three main questions you need to ask yourself in order to determine the best possible software solution.
What are you going to track with your software?
There are many different KPI dashboards, from simple and free dashboards that have the feature to track only a limited number of KPIs, dashboards that are following specific methodologies such as ''Balanced Scorecard'' or more complexed dashboards that come as a part of a large Businesses Intelligence (BI solutions).
Depending on what you'll need to track, you will pick the suitable software. If you are looking to follow only a few most critical KPIs, a simple free dashboard will do the job for you. If you will need thousands of metrics for your KPI, and many data integrations, BI solution with the incorporated Dashboard is a better choice for your business.
What features does your business require from the Dashboard?
Most software solutions have a similar set of basic features like full-screen modes, various designs of charts and diagrams, integrations, and so on. But specific features such as extra analytics tools, optional manual data insertion, and KPI reports aren't always included, but they're incredibly beneficial, especially after certain stages of development when they even become crucial.
What is your budget?
You know how much you can spend on the KPI dashboard software, but you will need to do some research to pick the best deal for the price listed. Almost all KPI dashboard tools are delivered through an online platform, with different annual and monthly subscription plans, depending on what they offer. Online platforms offer many economical solutions in terms of hosting, hassle free maintenance, and automated feature updates, but the costs may rise eventually. Some vendors offer all-inclusive features for a specific price, while others charge additional fees for additional data storage, extra users, per number of KPIs and dashboards.
You need to determine which offer is the best, depending on the price and features ratio. Leader providers for the key performance indicators dashboards are Dundas, IBM, Microsoft, Oracle, Qlik, and Tableau. However, there are also other, more affordable solutions such as Klipfolio, Geckoboard, SimpleKPI, Tableau, and they still have exceptional features.
KPI Dashboard Examples
Leaders in this business need to observe and control sales executives and revenue data to achieve the company goals. Efficient sales board should provide sales information at a glance, in order to effectively manage the sales team.
The KPIs and metrics that are supporting this Dashboard are allowing the insight into the following graphs:
- Sales by Region - overall revenue provided by all sales executives in a specific region.
- Cumulative sales - cumulative revenue for the company per given month.
- Total Sales Revenue - total produced revenue month by month.
- League Table - performance ranking table showing the top-performing sales executives.
- # of Sales - total number of individual sellouts by volume.
- Commission payable - commission payable on formed sales revenue.
- Average Sales Value - average revenue formed per unit sold or individual sale.
- Closing Ratio - lead to sale ratio, including all sales executives.
One of the fastest-growing businesses, marketing, often adopt key performance indicators dashboards because of the excessive volume of data that is always increasing. These data sources are generated from various digital channels, and they need to be visualized for better tracking and understanding. Marketing dashboards have several subcategories such as SEO (Search Engine Optimization), Content Marketing, Social Media, and many more other separate dashboards.
Here are some of the marketing metrics and KPIs you may want to track:
- Budget Remaining - budget remaining from the marketing budget at the given moment.
- Leads Goal - the actual number of total leads from all channels against the desired goal.
- Website Visitors - website visitors trend.
- ROI - insight into the return on investment from marketing actions against revenue.
- Leads by channel - check the share of leads by channel.
- Social Reach - visual insight into the growth of social media engagement for the previous year.
In manufacturing, keeping processes and equipment functioning at their optimum can make the difference between success and failure. Manufacturing dashboards are used for both real-time monitoring performance and analyzing trends to pinpoint opportunities to improve processes.
Some of the key performance indicators and metrics used in Manufacturing business:
- Units Produced - an overall total of units produced by the factory or sight.
- Product Rate - number of units produced displayed by the machine.
- Operators - the number of open operators on the line or machine.
- Units Lost - the total number of units lost in a given production.
- Causes - the logic for lost units displayed by the various causes.
- Units lost by machine - the number of units lost by machine.
- Plant productivity - the overall productivity of the plant, factory, or site.
- Machine productivity - productivity by specific line or machine.
KPI Dashboards are considered for one of the essential tools in modern-day business. With this tool, you will be able to check the day to day processes and outputs of your company and act even before the problem occurs and affects the performance of your business. It will give you instant access to all your most important key performance indicators so you can make decisions, track and analyze how your business is moving towards desired goals.