GETTING AND KEEPING all management levels aligned around business objectives can be nearly impossible if the strategy isn’t reiterated every 30 days. People simply forget. Plans gather dust.

But in this “do more with less” economy, it’s easy to focus on cost cutting and daily fire fighting, rather than the larger, long-term growth picture.

Large and small organizations alike are turning to dashboard applications to keep key decision-making metrics in front of owners and managers to track progress against strategy. These technology-based reporting tools can correlate business objectives with hard numbers to show how internal processes measure up to predetermined goals, and visualize data to offer new perspectives.  

For all the benefits dashboards offer, development can seem overwhelming.   Here are four basic steps for getting started:

Step 1:  Plan strategically
Two key questions every organization must answer, according to Peter Drucker, are: “What is our business?” and “How’s business?”  The answers will drive many dashboard decisions.  This planning phase evaluates what the company does that generates customer value.

For example, a financial services firm provides value through advice and investment vehicles to instill financial security in its clients. A market research firm provides value by helping companies increase market share by understanding customer behaviors.

It’s important to quantify this value up front to ensure the resulting dashboard drives company success, whether bottom-line profits, new customers, increased market share or other goals.  That’s why an executive sponsor is integral to successful dashboards. Without this business leadership, companies sink a lot of money into a dashboard and realize no additional return.

It’s easy to pass over this step because of excitement over new technology.  However, a common reason for failure is locking into the technology before thinking strategically.

Step 2:  Define metrics
Business value must then be translated into performance metrics. A metric is a measurement of a business activity with a target value and a clearly identified owner — such as the CFO, a sales manager or customer service rep.

For example, one wireless company that valued Wall Street’s reactions to its financials provided one key metric — average revenue per unit (ARPU) — as part of its strategy to gauge growth. This indicator was chosen because the company could assess its value all the way through the organization down to the customer service representative, who could see ARPU on a customer-by-customer basis.  This detailed information empowered reps to communicate the company’s value and then influence customers.  

Successful dashboard applications require more than putting static reports online. In this step, a team of data owners, users and IT staff discuss metrics and the many different ways to slice them, such as by time (yearly, quarterly, monthly, weekly), revenue centers, business locations, and other business hierarchies.  Each dashboard should contain only the most important metrics  —  8 to 10 at the most — so as to focus on the truly key metrics that drive value.

With metrics identified, consider where the data resides and how it will be gathered, integrated and structured to maximize decision-making. This can be a significant process because many companies use multiple systems, Excel spreadsheets, and Access databases to perform operational and financial reporting. The dashboard team should diagram where the data is coming from, how frequently, in what format, and where to centralize it for the dashboard.

This is a step that is often underestimated. The dashboard is only as good as its data foundation. A database design with high-quality, consistent data is critical for analytical applications.

Step 3: Visualize
Consider next how to visually represent the data for easy interpretation and user friendliness. Use mockups and visual models for the dashboard requirements and design process to quickly allow all users to understand what’s possible and provide valuable feedback.

Data visualization can range from basic data tables and red, yellow, and green).  There are also ways to visualize data geographically using interactive maps within the dashboard.

Questions for the team to ask during this step include:  “What are we trying to communicate, what are we trying to influence, and why?”  The answers depend upon the desired actions that people will take as a result of monitoring the dashboard.  It could be a trend over time, a comparison of actual numbers versus plan, company versus industry comparisons, and more.  The key here is to define what is truly needed rather than what the technology can do.

Step 4:  Start building
As decisions are made on visualization, the dashboard can be built incrementally in order to drive value to the business as quickly as possible.  Once in the users’ hands, feedback aids future iterations.

Ideally, the application can reside on a technology platform that the company already owns to minimize investment and training, and maximize return.  Some dashboard applications can be created with no additional capital investment using Microsoft Office or open-source technology.  

Many companies already own other applicable technologies such as Microsoft Analysis Services or Crystal Reports. Oracle, IBM, SAP and others offer sophisticated business intelligence platforms to meet more complex dashboard and infrastructure requirements.

Dashboards can alert owners and managers when issues arise, understand what caused the issue, and enable appropriate action.  With everyone driving toward the same benchmarks, companies can track progress against strategy and look for new opportunities to do more for less.