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DASHBOARD: What is a Dashboard?

Knowledge
By Nicolas Oury On August 25, 2015
DASHBOARD: What is a Dashboard?

A dashboard is a software solution organizing and presenting a given set of information in such a way information becomes easy to access, read, analyze and understand.

Pursuing goals

There are multiple goals you can target with a dashboard:

  1. Fact-based communication: your intention is to use dashboard to get/provide a clear vision of what is currently happening in your organization or department. Putting in place some simple indicators, you want to follow how your business is going, evolving and finally who is contributing to this overall performance. For instance, you would like to follow the evolution of your revenues. Your objective is then here to communicate those figures and related performance to your management, yourself (activity monitoring) or to your staff.
  2. Evidence-based decision-making: your intention is to use a dashboard to understand what is currently happening in your organization or department. By helping you to get the answers to the questions you have on your activity, the dashboard will help you taking better-informed decisions, based on facts and evidences.

What a Dashboard looks like

A dashboard typically looks like a set of sheets being composed by charts, graphics and text in such a way information is easy to understand at glance.

Here are some examples (based on our LinPack dashboards):

Additional examples in our data visualization gallery.

How to structure a Dashboard

When creating a dashboard, it is essential to build a minimum of two layers:

  1. Communicate & Monitor: In this layer, you organize and present the information in a very simple way: what is my current volume of activity, who are my best customers, what is my actual margin… The purpose of this layer is to answer to pre-defined questions. As soon as you open your dashboard, you want to know what is the health of your organization & activity
  2. Analyze & Understand: If essential, the previous layer is only giving you a superficial level of information. Indeed, you have noticed for instance your turnover is decreasing, what is key for you now, is to understand why. This is the purpose of this second layer: answering non-predefined questions. In this layer, the level of interaction you have with the dashboard can be extremely advanced allowing you to understand the rationales behind the figures, discover the root causes of your performance. Concretely, this layer must allow you to perform self-service reporting, namely get any answers to your business questions.

Only the addition of those two layers will allow you to appropriately Decide & Act.

How to define a Dashboard

To make it short, a dashboard is the conjunction of three elements:

  1. KPIs / Key Performance Indicators: list of all the indicators you are using to measure your performance in your organization or department. Here are some common KPIs: Turnover, Margin, Margin %, Headcount, Assets, Liabilities, Sales, Sales Volume, Shipment Lead-time, Number of Customers…
  2. Dimensions / Analytical Axis: level of detail at which you gathered your raw information and at which KPIs are defined. For instance, Sales could be defined at following level of detail: Product, Customer, Date, SalesRep…
  3. Data Visualizations: set of charts (bar chart, line chart…), graphics, images, text or whatever visual elements allowing to maximize the user-comprehension of information (KPIS & Dimensions)

Finally, the overall experience offered in the dashboard is essential to its acceptance by the end-users and of course essential to its impact on daily business activities.  How to move from a macro to micro level of information? How do we empower end-users to interact with the information?

Cases when a Dashboard is relevant

You have to consider a key aspect when wondering if a dashboard would bring value to your organization: What is the style of your organization in terms of decision-making?

There are three ways to take decisions:

  1. Tradition: many organizations have been successful across years but always applying the same principles, rules recipes across times. A traditional approach means you would be incline to redo what you have already been doing in the past, without wondering yourself whether the context changed or not. It has been successful so far, why changing?
  2. Gut-feeling: most probably the most common way to taking decisions. Based on what you already know and your first impressions, you have the feeling you have to act this way. What you feel about the situation is enough to decide on.
  3. Information-based: you like to take decisions based on evidences. You first seek for the raw information you would need to know, before taking your decision. Then, you gather and consolidate this information and once you really understand what is happening, you are likely to take fact-based decisions.

A dashboard is the essential companion of an information-based decision-maker.

Leveraging information

The raw information which will be used in a dashboard of course determines the scope of what you will be able to do with your dashboard.

To make it simple, there are generally two kinds of information to leverage:

  • Internal Data: by gathering and leveraging the information which is generated in your organization, you often get 90% of the information you need to take informed decisions. This information usually resides in your information system such as ERP, custom solutions, Excel files, Web sites… Here you typically consolidate and leverage information on sales, finance, human resources, production, supply chain…
  • External Data: more and more organizations are completing the internal information they are analyzing by external data. Why this? Because it offers a fantastic opportunity of benchmark. Imagine you increased your sales by 15% compared to last year. You think it is a good result? Not sure… indeed, the market might have been growing by 20% over the same period of time meaning you are actually losing some market share. By leveraging external data, you now have the opportunity to understand your performance in its context, in your market, compared to competition, compared with macro-economic figures… better informed, better decisions taken.

Typical Dashboards

Dashboards can be created with any kind of data, but following ones are the most common: Finance, Procurement, Sales, Marketing, Digital Marketing, Manufacturing, Product Development, Supply Chain, Logistics, Inventory, Call Center, Human Resources, Social Media, Information Technology, Project Management, Risk Management, Quality Management, Sustainability & Safety, Life Sciences, Banking, Insurance, Hospitality, Healthcare, Retail