How KPI dashboards can benefit your business
Business intelligence (BI) software and tools are transforming the way that businesses are able to use, and learn from, the masses of available data about their business and customers.
That being said, one of the most useful tools companies can harness to visualize the performance of many aspects of their business is the KPI dashboard.
What is a KPI dashboard?
Dashboards are visualization tools that pull data from an array of sources, displaying the findings in an easy-to-digest format that presents the story told by the data. Using items such as graphs and charts to draw attention to the most important patterns and trends in data, dashboards can provide an at-a-glance overview of a business’s performance.
Key performance indicators (KPIs) are the metrics tracked by businesses in order to determine the success of a particular strategy and evaluate how successful their efforts towards a specific target or goal have been. Accordingly, KPI dashboards ensure that the most important metrics are highlighted to accomplish this effectively.
For example, if one of the business’s priorities is to maximize the return on investment (ROI) of marketing spend, then one of the most significant metrics would be cost-per-acquisition rather than metrics such as likes and comments on social media posts.
If another is to reduce employee churn — and the company has put measures in place to keep employees engaged and satisfied in order to achieve this — then measuring the rate of employee retention would be one of the most relevant KPIs to track in order to evaluate the success of strategies in place to fulfill this goal.
KPI dashboards display an organization’s key performance indicators visually, allowing users to easily see the most important metrics for evaluating aspects of the business’ success, in addition to any patterns or trends that emerge from the associated data.
KPI dashboards accomplish this with the aesthetically concise presentation of visual elements such as charts and graphs, which an organization can use to monitor its past and present performance. These dashboards can even be used to display predicted future performance based on trends uncovered by the visualizations.
Why are KPI dashboards so important?
KPI dashboards can help businesses on a number of different levels, from boosting operational efficiency to improving strategy and streamlining communication between departments, thus preventing silos.
Having said this, here are six specific ways that KPI dashboards can improve businesses.
They allow users to quickly gauge whether a strategy is working
When chosen well, an organization’s key performance indicators represent the metrics that best indicate progress towards a particular goal.
With that being said, when a business implements a strategy with the hopes of moving towards a goal, using a KPI dashboard can help users judge almost immediately whether a strategy is working. Once this judgment is made, decision-makers can act on the results almost instantly since data is retrieved and displayed in real time.
If the KPI is negatively impacted, relevant personnel can choose to halt the strategy and direct resources toward other avenues. On the other hand, if the KPI is positively impacted, business leaders can decide to continue forward with that strategy to enhance results even further.
They draw attention to the most important metrics
With insurmountable volumes of data being produced from an array of different sources, it can be difficult to derive insight and meaning from that data in order to put it to use.
With KPI dashboards, the most important data is retrieved and displayed in visualizations that make it easy to see how a business is performing based on the metrics that are most indicative of its success without the need to dive deep into the data itself.
Some dashboard tools give you the ability to display a summary number on your charts. This effectively conveys the most important metrics, even if users only have a short amount of time to spend interacting with the dashboard.
They make data insights accessible to all
In the past, you had to be a data analyst to make use of data, combing through vast data sets and using complex statistical analyses. After that, the findings could be presented to those in the organization who will use those findings to make an impact.
However, KPI dashboards provide a ‘big picture’ of the story told by the data, displaying the data in easy-to-understand visualizations that clearly show trends and patterns as well as the figures that matter most to businesses.
This means that anyone can look at a KPI dashboard and understand how a strategy – or the organization as a whole – is performing.
This enables those in management and leadership roles to learn from data immediately, putting the data to work and making any necessary changes to their strategy.
They allow data to be pulled from numerous sources
A brilliant feature of business intelligence tools, such as dashboards, is that they have the ability to draw data from numerous sources, as well as aggregate and sort through the data to provide comprehensive insights that take the whole picture into account.
This means that any visualizations produced from the data are fully informed and provide the most accurate view of the metrics most important to discerning the business’ performance.
They allow for easy sharing of information
One of the key advantages of KPI dashboards is that they’re presented as snapshot overviews, which can be easily understood by everyone.
This, and the fact that most dashboards can typically be accessed from anywhere (some on mobile devices), makes them ideal for sharing information between individuals and across departments to maximize collaboration within the organization. This, in turn, prevents silos and ensures that each part of the company is unified and working towards the same goal.
Unlike reports, which take time to sift through because they’re in a format in which details can easily be missed, KPI dashboards present at-a-glance insights that can be understood within seconds of viewing, making them ideal for communicating the most important messages across a business.
They facilitate data-driven decisions
In the past, organizational decisions would be made based on subjective thoughts and opinions. This usually came down to what those in management and C-suite roles thought was working for the business and what was likely to propel the company forward.
With the advancement of business intelligence tools, however, and particularly the development of KPI dashboards, business leaders are able to view how their company is really performing based on objective results provided by the data.
This eliminates the role of guesswork in designing the optimal company strategy, allowing data-backed decisions to be made that can maximize a business’s success.
How should you go about creating a KPI dashboard?
KPI dashboards can do wonders for your business, but when creating KPI dashboards for your company, there are a few guidelines to keep in mind.
1. Find a suitable business intelligence solution
When browsing for the right tool to enable you to start building your KPI dashboard, you should consider what you need from your dashboard solution.
This could include the integration compatibility of the dashboards with certain data sources, the type of design you’re looking for and whether the dashboard solution has any advanced capabilities you need – such as the ability to ‘drill down’ into the data, for businesses with data analysts that can dive deeper into the data and provide additional insights.
Moreover, consider whether you require the use of other business intelligence tools. If so, it might be a good idea to opt for an all-in-one solution to fulfill your business intelligence needs.
2. Choose your key performance indicators
Making sure you choose the right KPIs is crucial to the efficacy of your KPI dashboards in terms of their ability to provide the greatest insight into specific aspects of your business.
Many organizations benefit from using multiple KPI dashboards, depending on the department or the particular goals a business has.
For example, if a top priority for your business is improving your social media presence, then a KPI dashboard dedicated to social media – including KPI metrics such as social media impressions, likes and shares over time, and social media ad spend – can help businesses to hone in on this goal.
However, KPI dashboards can also be used to keep specific departments on track for success. In marketing, for example, metrics such as marketing spend, cost-per acquisition, ROI, and other KPIs specific to your unique marketing goals can keep your marketing department informed.
Likewise, a KPI dashboard for the organization as a whole can help draw attention to the overall performance of the business, allowing C-suite individuals and shareholders to gain a comprehensive view of company success.
3. Keep the design simple
The principal selling point of a KPI dashboard is that organizations can easily see how the business is performing at a glance. Keeping the design simple and focusing on function makes this possible.
If a design element doesn’t directly contribute to the story of the data, then it shouldn’t be there; distracting design elements and unnecessary widgets decrease the value that a KPI dashboard can provide.
4. Don’t overload your dashboard
To maintain your KPI dashboard’s function as an overview that draws attention to the most important metrics for evaluating success, you should keep the metrics shown to a minimum.
In practice, this means that your dashboard should fit on a single page and show around 5-8 KPIs, to avoid distracting users with metrics that aren’t as important and keep the focus on the most critical measures of success.
By following these steps, you’ll be able to effectively utilize KPI dashboards to solve business problems and help your company succeed.