Dashboards & KPI
Key Performance Indicators – KPIs – are at the centre of a lot of current performance management processes.
In the past, KPIs could only be measured retrospectively because the data had to be collected from various systems, painstakingly collated, and then turned into reports. The data was often a couple weeks to a couple of months out of date by the time senior managers got to see it. What’s more the numbers were often massaged at the draft report stage, before senior managers ever saw them.
All of that has changed with the advent of system dashboards. These present interactive, graphical views of how the organisation or business is doing, measured against its KPIs. The key thing is that they’re real time, or as close as possible to real time. Senior managers can see an indicator turn red, yellow, or green, and drill down to find out where exactly the problem, or success is, and taking immediate action if necessary. The dashboard also allows managers to identify anomalies in performance. Outperformers can be rapidly rewarded and underperformers can be given the support they need to achieve their targets.
However, the old mainframe mantra, GIGO (Garbage In, Garbage Out), still applies. If the data coming in is inaccurate, patchy or out of date, the dashboard may well give misleading results. If only certain systems are included, the view of the organisation will be skewed. And if strategic, as well as day-to-day decisions are being made on the basis of this data, the business could well be steered in the wrong direction, as well as being mismanaged.
If the data is high quality, reliable and timely, and is drawn from live systems such as the corporate Customer Relationship Management (CRM), or the corporate Enterprise Resource Planning (ERP) systems, it makes an invaluable basis for planning and management.
But their are some potential roadblocks…
Obtaining the data can be problematic if you have multiple systems or do not have a trained administrator or in-house systems guru to help you set up the dashboards and use them as intended. Not to mention, in some organisations, not all the data required for high quality analysis, is in the CRM or ERP. Many companies multiple ERP and/or CRM platforms. HR data may be in a specialised HCM (Human Capital Management) syste. Operations processing data may also be in a series of specialised systems. So, to be truly meaningful, a dashboard has to draw data from a range of systems – yet even a simple data feed can present some technical challenges.
Business Intelligence systems can use multiple data sources.
This is where Business Intelligence (BI) systems come in. They are marketed on the basis that they can draw data from any system, apply analytics that will produce meaningful KPI information, and display it in a dashboard. However, companies that have implemented BI, have frequently found the process not quite as straightforward as promised.
For one thing, interfaces to ERP systems, are not particularly cheap or easy to implement. Sometimes, the promised ability of the BI system to draw data from multiple sources, turns out to be a download from a corporate system, into a spreadsheet that is then uploaded into the BI system. The data displayed on the dashboard is then not necessarily in real time.
These problems occur because larger organisations are often using a plethora of legacy and other systems. Some are cloud-based, others run in-house, some are Microsoft, others are Oracle, SAP or single suppliers. Even the Microsoft products may have had extensive customisations over the years. So pulling all of this together is not a simple task. Sometimes, there is a data warehouse, which can be used as a data source; in other cases, expensive extra code modules are needed to make one data set comparable with another.
However, if it can be made to work, the benefits of a fully functioning dashboard are enormous. Managers can manage the organisation in real time, taking action to mitigate risks and problems before they become major issues. In areas such as engineering, where many people take in diagrammatic or graphical information more easily than verbal reports, the dashboard can present very complex process information, very efficiently.
What’s more, if the KPIs are carefully chosen, they can start to reveal new insights into the business. Instead of simple data metrics, the dashboards can present sophisticated ratios, matched data, statistically significant correlations and much more. Although the presentation may look colourful and simple – charts, bars, scatters, traffic lights and so on – the knowledge illustrated graphically, may be a skillful synthesis of performance insights that show the way the organisation is behaving.
In this respect, BI systems can be looked upon as a great partner to ERP and CRM systems, in that they can be used to bring in outside data to compare with corporate performance KPIs. This other data can consist of anything the organisation wants to measure against, for example, market prices for their product, or how much competitors are paying their staff.
Benchmarking in-house KPIs against outside data, can help to identify poor performance. But just as often, benchmarking can highlight a specific problem with inaccurate data within the organisation, and helps identify where efforts need to be made to improve the data collected, to get a better dashboard.