Most organsiations have multiple business units, divisions, levels and departments. Each have their own products, services, processes, applications, systems and targets. A good portion of these activities are redundant, and the organisation is split into every department focusing on what they think is the most important.
To rectify this problem, companies can benefit from using a magnifying glass something that focuses the entire organisation on the priorities and direction of the company. A dashboard is a tool that helps the organisation clearly and concisely communicate key strategies and goals to all employees and business units. The system should focus on key tasks and reports that advance the system’s goals and strategies. It should measure and reward performance and align efforts so that the management and members of the business units are clear on the direction to which all are heading.
Performance Management System
Organisations can benefit a lot from a performance dashboard that translates the organisation’s strategy into objectives, metrics, benchmarks and alerts. This then becomes a performance management system.
Typically, a performance management system offers 3 main functionalities:
1. MONITOR critical business processes and activities using metrics of business performance and trigger alerts when potential issues arise. At an operational level, organisations generally use dashboards to monitor core processes that drive the day to day of the business. At a strategic level, organisations use the dashboard to monitor progress towards achieving short, medium and long-term goals.
2. ANALYZE large volumes of historical data across many dimensions so as to be able to make efforts to understand the cause of the problems
3. MANAGE people or processes to improve decisions, optimise performance and steer the company towards its goals.
Three Types of Performance Dashboards
1. Operational dashboards -monitor core processes. Used by frontline workers and supervisors who deal directly with customers or manage the delivery of the organisations’ products and services
2. Tactical dashboards – track departmental processes. Managers use tactical dashboards to compare performances of their areas against plans, forecasts or results.
3. Strategic dashboards – monitor execution of strategic objectives.
Three Views of a Performance Dashboard
Like an onion with many layers, a performance dashboard lets organisations peel back the layers to discover the cause of the problem. Each successive layer provides additional details, views and perspectives. This layered approach helps users get to the root of the problem quickly and more intuitively.
Top layer (displays exception conditions) Summarised graphical view
Purpose: Monitor key performance metrics
Display: Graphical Indicators
Technology: Dashboards, scorecards, portals
Middle Layer (slice and dice data) Multidimensional view
Purpose: Explore information from multiple dimensions
Technology: OLAP, interactive reports
Bottom layer (examine individual transactions)
Purpose: Examine details before taking action
Display: table or report in separate window
Technology: Operational reports, data warehouse queries
Benefits of implementing a performance dashboard
1. Communicate strategy
2. Refine strategy
3. Increase visibility
4. Increase coordination
5. Increase compliance
6. Increase motivation
7. Give one view of the business
8. Reduce costs and efficiency
9. Deliver actionable information in a timely fashion
A performance dashboard helps companies to have access to the right information at the right time to optimise decisions, enhance efficiency and accelerate profits.