A KPI (key performance indicator) dashboard displays information critical to the success of your business on a single screen. It’s an easy, coherent way for staff and stakeholders to access the key information required for day-to-day decision-making.
Read more: Harnessing KPIs for Better Business
It can help to eliminate the common mistakes that businesses make with KPI reporting.
Businesses actually adopted the term “management dashboard” from cars and, in many ways, they work in the same way.
When you’re driving in your car, the dashboard displays the speed you’re travelling at, how much fuel you have, the time, and a “check engine” light for when something goes wrong.
It’s all of the critical information needed to drive your car. It doesn’t show you the oil temperature or pressure, or the water temperature, or the fuel injection rate because they’re not critical for you to reach your destination right now.
In the same way, a KPI or management dashboard shows the most important information to help your team drive your business.
It doesn’t include all of the data that your business collects, only the essential information that’s linked to your strategic goals.
The information a dashboard will typically display includes:
- Strategic goals.
- Major projects.
- Action items.
If you’re serious about monitoring and displaying your data in meaningful ways, you should be using custom dashboard software.
However, many businesses still opt for software like Microsoft Excel as it’s familiar and seen as a safe bet.
Excel is a valuable piece of software in its own right, but it falls short when dealing with business KPIs as it can be clunky, complex, and time-consuming.
Specialist dashboard software simplifies your data into easy-to-understand segments. You don’t have to pore over spreadsheets to find meaningful insights.
Should every business use dashboards?
Almost every business can benefit from having a dashboard.
Here are some common red flags that suggest you should consider a dashboard for your business:
- You know business could be better, but you’re not sure how or where to start.
- You’ve selected KPIs and you’re tracking data, but you’re not quite sure what to do with the information.
- Despite your best efforts, you are lagging behind your competitors (you know this through benchmarking).
- Your data is located across multiple systems, rather than in a centralised hub.
5 benefits of using KPI dashboards
1. It manages complexity
The bigger a business, the more complex it tends to be. You might have different departments and branches spread across different locations, or you may have one office with separate teams working towards specific goals. Managers can often have competing priorities.
A dashboard helps to reduce that complexity by displaying the few critical measures that have the greatest impact on your business overall.
In saying that, a good dashboard solution should still offer the opportunity to dig deeper. For example, if you’re trying to find the underlying cause for a drop in a key KPI, you can use dashboard software to do that.
2. It consolidates information
Generally, each department or team in a business is responsible for managing their own information, which feeds into the overall picture of how the business is performing. A dashboard removes the clunky and often unreliable process of collecting information from the various and different parts of a business. It keeps each department and team constantly updated on how they’re performing in relation to the core strategy.
Dashboards can also consolidate information from the various software applications you use. Most businesses have software for finances, customer relationship management, human resources; the list goes on.
Having all of this feed into your dashboard software saves time and reduces the risk of errors.
3. It allows instant access to information
Traditionally, KPI or management reports have been presented monthly or weekly at mundane meetings full of spreadsheets and charts. In today’s fast-paced and highly competitive environment, you need a live and consistently updated dashboard.
Dashboards can be accessed by management and staff instantly from a tablet, phone or laptop. Staff can view company data in real-time and are better informed to make important decisions on the fly.
4. It holds you accountable
Dashboards can be designed to show action items from previous management meetings. This provides a level of accountability, allowing you to see whether or not your teams are following through on important action items.
Without these reminders, it could take weeks or months for you to realise that recommendations haven’t been implemented as expected. This can cost you valuable time and money.
5. It provides consistency
Dashboards provide a common way to talk about the same measure. For example, it’s possible that revenue might mean one thing to the sales department, and another thing to the marketing department. And your finance team might not use either of those definitions.
A dashboard provides you a commonly accepted definition of your measures, making sure your staff are on the same page.
Learn more about using KPIs to maximise your business performance in our free ebook!