Everyone loves a good comeback. Stories about celebrities like Robert Downey Jr. and Britney Spears climbing back to the top after falling so far capture our collective imagination. Movies like Rocky and Cinderella Man – about underdogs making a comeback – inspire us to think we ourselves can rebound from any setback.
Is your business intelligence dashboard the underdog at your organization? Dashboards have been around for decades, with some companies not putting the time and effort into updating them regularly to keep pace with the innovations in BI and the growing expectations of users.
Done correctly, BI dashboards are indispensable resources for decision makers, capable of bringing the most pertinent information to the forefront so leaders can take action. Conversely, BI dashboards that fall short of meeting the needs of business leaders will take a back seat in the BI toolbox or be forgotten about entirely. In order to keep decision makers coming back for more, BI dashboards must serve up relevant information, keep pace with new trends in technology, and at the same time maintain visual appeal. Read on for the 3 reasons why your BI dashboard may need a comeback.
Your KPIs aren’t KPIs…
Business intelligence dashboards are stuck in the past. It may be controversial to say but it’s true – not much has changed over the past few decades when it comes to BI dashboards. Sure, we’ve defined some decent design rules, some guidelines for developing good, traditional dashboards. But a lot of the dashboards I see as VP of Solutions Delivery at arcplan don’t adequately address the needs of today’s executives, who need cross-functional views of KPIs from various departments in order to make good decisions. We aren’t living in a silo’ world; decision makers need regular access to KPIs from finance, marketing, sales, operations and HR to make good decisions. Do you have a dashboard that enables this kind of view?
If not, let’s examine what’s wrong with your BI dashboards:
1. Their silo’d foundation is a hindrance.
In the early years of data warehouse development, data was stored according to functional areas or departments. Finance, Sales, and Operations each had their own data marts and corresponding dashboards for each department. In today’s business environment, dashboards that are silo’d like your data don’t accommodate your needs. With hundreds or even thousands at KPIs in use at your company – and limited time to access and evaluate them all – a silo’d approach to data access is problematic. You need to access important information at a moment’s notice, not waste time logging into individual systems or viewing separate dashboards to get the data you need to make informed decisions. You’ve probably quickly grown weary of this process and you may even be settling for whatever information is most convenient to use, which – needless to say – is usually not the best option. An ideal dashboard solution bridges multiple information sources to give you a holistic view of the organization – one that matches your role and includes only relevant KPIs.
2. There’s a “Where’s Waldo?” element to finding the right KPIs.
Recently I had a meeting with one of arcplan’s customers in the US, who explained that their arcplan system has grown to manage 4,000 KPIs in just 5 years.
As speculation about Apple’s iWatch grows – will it be a snap bracelet? will it replace the iPhone? – it got me thinking about a watch (of all things) supporting the vision of real-time analytics. What sounds stupid at first (the notion of an old-fashioned personal device, around for 5 centuries with little to no innovation over such a long period, inspiring a 21st century topic such as real-time analytics) has some merits if you think about it twice.
First off, wearable computing devices are real business. According to tech analyst Juniper Research, the next-gen wearable devices market, including smart glasses, will be worth more than $1.5 billion by 2014, up from just $800 million this year.
While the majority of those devices are sold in the context of fitness and healthcare scenarios, there is applicability in modern enterprises. In fact any business process that can benefit from real-time analytics can leverage computing devices that are “at hand” and travel with us easily.
So what business processes can benefit from real-time analytics?
Just as you can’t drive to work with your eyes only on the rearview mirror, you can’t drive your business forward by focusing on the past. Yet that’s what you’re doing if you’re relying solely on lagging indicators such as revenue, profit, or Cost of Goods Sold (CoGS) to manage your organization’s performance. These factors are important, but once they’re calculated, it’s too late to impact them. What you need are good leading indicators that allow you to spot trends and see issues before they balloon into real problems.
Leading vs. Lagging Indicators
Leading indicators are early predictors of sales and profit, and in combination with lagging indicators, they give you a holistic view of your company’s performance. Lagging indicators such as revenue, sales, expenses, and inventory turnover help you understand whether or not certain objectives have been met. They can depict trends when periods are compared, but by then, you’re too late to profit from the early discovery of the trend. Lagging indicators are calculated at the end of a period (month, quarter, etc.), so you won’t know whether or not a goal has been met until nearly the end of the period. Even if you run some ad-hoc reports throughout the period, you likely can’t get to the root of a problem in time to impact the outcome. Chances are, things were going wrong long before the lagging indicator on your dashboard turned yellow.
On the other hand, leading indicators pinpoint the source of future problems and help you predict whether or not the target values for your lagging indicators will be met. Leading indicators enable your company to avoid problems and operate more cost-effectively. For example, rather than tracking product returns (a lagging indicator), reporting a 90-day customer complaint trend allows you to fix problems earlier and less expensively. Drilling down into the complaints themselves, you might discover that a particular product has a defect that your quality assurance team didn’t catch. Removing the product from your shelves may save you a lot of trouble in the long-run, reducing complaints (and the negative feelings your customers may be starting to harbor toward you) as well as the cost of returns (returns aren’t free – they cost retailers nearly $14 billion a year).
Tracking receivables turnover (a leading indicator) enables the company to better manage its cash (a lagging indicator).
In our previous post in this series, we talked about the ingredients needed to create a fact-based culture among your internal supply chain teams and your external constituents (suppliers). Today we’re giving you the goods – sample metrics for your Quality Dashboards and Supplier Scorecards.
There are three critical performance drivers in the supply chain – Cost, Quality, and Time – all of which must be objectively managed. Some lend themselves to quantifiable metrics while others are more qualitative. In either case, supplier quality teams need a dashboard and scorecard(s) that makes all required information accessible and easy to consume. Let’s talk a bit more about cost metrics.
As much as 60% of the cost of production is purchased material content and 67% of the cost of poor quality is in the non-materials cost. With the proportionately large amount of money being spent on business processes that support production, both the cost of parts and processes must be managed with metrics such as: