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Developing High-Impact Dashboards
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If the answer to this question is that they ve never used them, this gives you a good idea of what types of charts will work for your audience Avoid using types of charts that are familiar to you or that look good to you but are probably not the ones that would make sense immediately to your business users If you were looking at a display of information, where would you want your critical KPI to be located (top, bottom, left, or right) If a list of values is being used for filters, what format would work best for you (radio buttons, dropdown list, check box, etc) Would you prefer to type in a specific value of a characteristic, such as Region, or choose it from a list How comfortable are you with analysis of two or three metrics on one chart, each with its own scaling This means your chart would have different scaling factors running up the primary and secondary axes Is that something that will be easy for the business user to think through or will it cause confusion The concern is whether the metric would be too unusual and possibly be misread, potentially causing errors in decision making If within your requirements you need additional drill-through reports, is this something that should be available via a context menu or a hyperlink directly on the dashboard screen I know some of these requirements sound like overkill but when we are developing a dashboard we are well past the fact that we are getting the appropriate data and information This is all about displaying the data correctly, accommodating the business user with information, and reducing the total time that they spend on getting to the data and rather increasing the time they spend on analysis of the data At this point take the time to diagram out an overview of what the dashboard will look like and socialize this throughout the business user community This additional effort will make the sign off of the final product easier and more successful
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What Are the KPIs
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We talk about these things called KPIs quite a bit Seems that everyone has some KPIs that they have to manage and need to understand the process of managing them during the business process Again, on this topic there are is a ton of additional information and material that is available so I ll keep my discussion just to the comments that make sense to our topic here rather than going into too much conceptual information There are a number of situations where the whole idea of KPIs needs to be revisited and reworded Maybe we can call it something else so that we get a clear picture of what these indicators really are I ve reviewed some of my projects and identified some of the critical areas where we will have to focus during the process of developing the correct KPIs One of my cardinal rules is that we try desperately to avoid having too many KPIs I can t tell you the number of times where I ve seen a dashboard overloaded with KPIs and you re constantly trying to manage one or the other of these different indicators We all know that there are critical indicators that will make or break our businesses and we just have to find the right ones and make sense of them
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During a project with a vehicle manufacturing company, we were reviewing these different groups of indicators and found that the inclination was to look at all of the business outcome indicators rather than looking at the source indicators After review, we found that one of the critical Key Performance Indicators is customer satisfaction During our analysis we found a direct correlation between the customer satisfaction level and the sales of their vehicles in the next 4 6 month time frame This was a great find since everything was driven (not a pun) by this analysis sales, cost of goods sold, inventory levels, labor costs and this impacted many other areas outside of just the revenue streams With this additional KPI in their dashboards we were able to really get some good information to them that would proactively impact their bottom line rather than trying to influence the actual sales numbers other ways such as discounts, promotions, etc During these fact-finding workshops, you have to realize that you can only manage a specific number of KPIs No one can manage 50 KPIs or even 30 KPIs, and even 20 would be a big challenge You need to be aware of the total number of KPIs and make sure that there aren t so many that they work against each other in the process For example, if you were increasing the emphasis of the overall worker productivity KPI, you might lower your rating on the KPI regarding employee satisfaction of their work environment Having indicators that work against each other is a no-win situation Normally within the company, these KPIs are tied to moves in positions, salaries, and bonuses, so the ability to identify just the correct few KPIs will be a very challenging process After you ve narrowed down the list of KPIs to about 15 or so we can organize them into groups and headings There are a number of groups that can be identified within KPIs One area would be in terms of the role that you are responsible for and the KPIs applying to that role If you are involved with management of a specific department, the KPIs need to be directed to just those activities and not be so wide-ranging that they encompass other areas that you don t have full control of during the Management by Objective (MBO) process If my MBO and bonus depends on the Net Profit Margin, then I need to be able to affect the total sales and the costs involved If I m only responsible for Total Sales and I m a sales person, then this is a fair KPI to be looking at during the year and to be gauged against Another area that we need to be aware of is the actual data that is being used in the calculation of the KPI We need to try and make the indicator as transparent as possible so that we can make sure the business user has the ability to manage to that specific indicator For example, if we use an MBO of sales, we want to make sure that it s consistent with the person s responsibilities If we use a sales number that is calculated with adjustments made for all sales except for sales of specific products or promotional activities, we start to muddy the waters and now the Account Executives are trying to understand the details of the MBOs rather than doing their job, which is selling Several other aspects of KPIs are more obvious with regard to the development and validation One is the fact that we have distinct types of indicators that separate measures into operational and strategic KPIs I m comfortable with the fact that we can focus our attention on the nature of the indicator and make sure we are not asking someone to achieve a strategic goal when all they can really do is influence an operational measure Therefore, during the process of identifying KPIs and assigning them to individuals, we need to ask ourselves if these are KPIs that will affect the day-to-day activities of the person or are they KPIs that will affect the goals of the company We see these two different groups of KPIs all of the time and should be very familiar with the differences
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