Article

Guide to building effective dashboards and scorecards

SearchDataManagement.com editorial team

Many executives and business users use dashboards to understand how their business is performing. But in some organizations, dashboards are underutilized or underappreciated. It is a perpetual challenge for dashboard designers to present up-to-date information in a clear, concise manner that encourages interaction and meaningful results.

In this guide, learn advanced strategies for creating actionable, interactive and user-friendly dashboards that will help your organization track key performance indicators (KPIs). Learn how to get started with dashboards, find out what a dashboard is and what it is not.

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Discover how to gather input from business users about what they need in their dashboards and how to create different dashboards to meet the needs of various departments. Hear from experts Rick Sherman and Mark Whitehorn on dashboard design and learn new trends to help optimize today's dashboards. Get tips, screenshots and examples from BITadvisors, Inc. a Hingham, Mass.-based consultancy that specializes in designing effective dashboards and helping organizations make the most of them.

 


Don't miss the other installments in this dashboard guide
How to get started with dashboards
10 key elements for effective dashboard designs
Executive dashboards and data visualization trends and future outlook
Working with dashboard editors for streamlining and increased user adoption
Real-life examples of effective dashboard design
How to create effective dashboards and scorecards
 


 

Executive dashboards and scorecards: How to get started
By Hannah Smalltree, Editorial Director

 

[Editor's note: This story was originally posted on SearchDataManagement.com on September 10, 2007. ]

 

Executives love the concept of business intelligence (BI) and corporate performance management (CPM) dashboards and scorecards -- but they are often unprepared for the costs and complexities of deploying them, according to analysts.

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The dashboard attraction is fairly obvious. What manager wouldn't want a graphical user interface that shows, at a glance, metrics and key performance indicators (KPIs) about how business is performing? Consider the alternatives -- using complex reporting applications, requesting information from employees or, worse, waiting for paper reports. Executives often return from industry events telling their IT staff, "Just give me a dashboard!" Gartner analysts say.

But it's not quite that easy, according to Wayne Eckerson, director of research for the Renton, Wash.-based Data Warehousing Institute and author of Performance Dashboards: Measuring, Monitoring, and Managing Your Business. First, delivering effective dashboards and scorecards relies on a sound data infrastructure.

"A lot of folks see the sizzle of a dashboard and want it, but when you tell them how much it's going to cost to [create] a highly reliable, highly available system that delivers data -- from a variety of different sources -- that's been integrated, cleaned, reconciled, loaded and delivered on a timely basis, they tend to shy away," Eckerson said.

And that may be before they hear the cost and implementation timeline.

"[People] think they can get a dashboard on the cheap for about $10,000 -- when, in reality, if you're starting from scratch, it's probably going to cost you half a million dollars," Eckerson said.

Then there's a recommended two-year timeline to optimize the content and context of dashboards and scorecards, according to Colin Snow in a 2007 interview. Snow, formerly a vice president and research director with San Mateo, Calif.-based Ventana Research Inc. authored the firms' 2006 dashboard study and survey of almost 600 executives.

Ultimately, though, implementing a dashboard is worthwhile, Snow said. It helps companies align operational performance to corporate goals and strategies. About 50% of the companies surveyed by Ventana thought they were effective in achieving performance alignment before dashboards and scorecards, but that number jumped to 75% after an implementation.

There are some best practices when it comes to preparing for and evaluating dashboards.

Understand the difference between dashboards and scorecards

The two terms are often used together, Snow said. They are distinctly different -- but often confused.

 

  • Dashboards are reporting tools that consolidate and arrange numbers, metrics and sometimes scorecards on a single screen. They're often tailored for a specific role and display metrics targeted for a single point of view or department. They don't have to conform to a management methodology.
  • Scorecards are applications that show progress toward a strategy, goal or objective using KPIs, which are more meaningful than just any metric since they actually indicate the performance of the business. Scorecards may be part of dashboards but are different from them because they include multiple points of view and apply a management methodology -- such as balanced scorecard.

"Don't confuse monitoring with managing," Snow said. "[For example] a sales dashboard would tell you revenue attainment toward goal, but a balanced scorecard would tell you if that business is actually profitable."

To figure out what's best for a project, start with the end in mind, he advised.

"Find out from your executive teams what they really want to do," Snow said. "Is it that you want information in a scorecard and you're tracking corporate strategy? Or is it just something I need to do to monitor an operation, process or portion of the business?"

Complete a performance management process and system assessment

Next, organizations should self-evaluate -- and complete a "thorough, unbiased assessment" of financial and operational processes and technology, Snow said. This can uncover problems, help set priorities and benchmark current situations, which will be helpful later on in evaluating the dashboard project's effectiveness. In the process, organizations can also collect the data needed to build a business case for the project.

Identify user requirements and project scope

This requires defining the "performance network," or who in an organization will need access to a dashboard or scorecard, Snow said. It also entails scoping the project -- figuring out exactly what will, and will not, be delivered in each phase. This is apparently easier said than done.

"Projects get derailed very quickly if the scope is not defined well up front," Snow said. "The project goes into scope creep and starts ramping up in features."

Trying to do too much too soon is a proven recipe for failure, he said.

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Build a business case for executive dashboards and scorecards

This requires more than just an ROI analysis, Snow said. Dashboards and scorecards require executive support, "selling" the project throughout the organization, and effective change management processes.

"People hit walls at the change management piece," he explained, "because there's a cultural shift and change that happens when information is more visible."

Problems can arise when dashboards publish data that used to be more private, held in someone's own spreadsheet or a single department. This visibility is often a good thing, but organizations should be primed for this change up front. This means discussing the potential information that may be published on a dashboard or scorecard, Snow said, and defining what actions will be taken based on that information.

Evaluate dashboard and scorecard technology

It's common for organizations to skip many of the previous steps and evaluate technology first, he cautioned. But all of the steps leading up to the technology evaluation contribute to creating clearly defined requirements -- and this leads to making the right software purchase for an organization's needs. Once technology has been selected, Snow recommends proof-of-concept projects to iron out potential data problems, further refine design plans, and start to build more support and buy-in before the dashboard or scorecard goes live.

Plan a parallel data quality or master data management project

Data quality is a serious issue in dashboard and scorecard projects, according to Snow's research. If dashboards display incorrect or inconsistent data, it hurts user adoption and can force companies to "back in" to an unplanned data quality or master data management (MDM) project. While MDM can be a major undertaking, Snow explained, it's extremely important to have enterprise-wide agreement about things like an organization's definition of a "customer" or "product." And it's better to tackle these sorts of data quality and master data issues up front, rather than after a dashboard or scorecard has been deployed.

 


Don't miss the other installments in this dashboard guide
How to get started with dashboards
10 key elements for effective dashboard designs
Executive dashboards and data visualization trends and future outlook
Working with dashboard editors for streamlining and increased user adoption
Real-life examples of effective dashboard design
How to create effective dashboards and scorecards


 


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