According to Microsoft Power BI , Key performance indicators dashboards are tools that unite data sources and provide at-a-glance visual feedback showing how your business is performing against your key performance indicators (KPIs). A Key performance indicators dashboard is a straightforward visual representation of the most relevant information that decision-makers require to achieve their goals. Modern KPI dashboards make it simple for any user to study the data behind the KPIs and discover actionable insights. A KPI dashboard, in this way, translates enormous data sets from across an organization into data-driven decisions that can help your business. A Key performance indicators dashboard converts large amounts of data from across an organization into data-driven decisions that can help your business. The most accurate and comprehensive KPI dashboards are created by data teams that employ strong BI technologies that are also tailored for the average business user who does not have data analyst experience.
Types of Key Performance Indicators Dashboards
Strategic KPI dashboard
Strategic dashboards are commonly used to view the entire business. They include significant performance metrics at the highest level. They provide a bird's-eye view of your firm, allowing you to see the general health of your company at a look. They typically provide high-level metrics for the CEO, executive team, or manager. According to research by Eckerson in 2005, performance dashboards integrate an organization's strategy into goals, KPIs, initiatives, and activities that are specific to each group and people within the organization.
These dashboards are an excellent way to see the present well-being and progress of the business in question. Strategic Key Performance Indicators dashboards are used to make strategic decisions by exposing opportunities and weaknesses to relevant stakeholders. Strategic KPIs would typically represent the health of the business and measure the performance of future business goals, such as growth. Because they attempt to provide a true picture of development over time, these KPIs are not often monitored daily.
Operational dashboards deliver real-time data to managers and employees, which is critical for making informed decisions on day-to-day operations. They translate a great deal of data from various sources into a single, easily comprehensible illustration. Operational dashboards are used to monitor operations in a certain business area. Although operational KPIs are often linked to strategic KPIs, they are focused on key operations or departments such as product development, marketing, or internal initiatives. This data is then used to make daily management decisions. Strategic measurement does not require real-time performance monitoring.
Benefits of KPI Dashboards
Dashboard monitoring can assist the user in monitoring and measuring each employee's KPIs (Gusnadi, 2019). The Key Performance Indicators dashboard includes real-time analytics and interactive data, allowing you to monitor performance indicators in real time and avoid the need for constant file exports and complex information searches. Real-time dashboards not only provide immediate analytical insights but also allow for interactive components to be explored as needed, allowing organizations to assess their progress toward their goals. It simplifies complex data, making it more accessible and understood to a wider range of users.
The Aberdeen Group found that companies that adopt and analyze KPIs outperformed their competitors in a study of over 350 businesses. KPI dashboards consolidate a company's most critical operational data into one convenient location, assisting in the elimination of data silos, making KPI reporting more visible in general, and increasing efficiency in analyzing performance, setting objectives, allocating investment, and improving user workflows.
Unearth new opportunities and trends
KPI dashboards assist users in identifying noticeable trends in their data, uncovering possible possibilities and areas of strength (or underperformance) to establish or clarify their objectives and enhance and improve the overall performance of the business.
Related: Example Key Performance Indicators
How to create and organize a KPI dashboard
Set Goals & Identify Potential KPIs
Creating key performance indicators (KPIs) is an important aspect of the strategic planning process, which also includes identifying your organization's goals and objectives. But you can't design meaningful performance measures until you know what you're attempting to achieve. First, establish a particular set of goals that represent the objectives that your firm wishes to attain.
Select the relevant data sources.
Examine all of your available data sources and determine which are relevant. This isn't always easy, especially with all of the technologies available now. Data from numerous sources, such as your CRM system, website analytics, and accounting software, may be required.
Ensure your data is clean and accurate.
Because your analysis is only as good as the data you use, you must use clean and properly prepared data. Before creating a dashboard, you must effectively prepare the data to guarantee that your dashboard is accurate and straightforward. It doesn't matter how visually appealing your dashboard is if your data is inaccurate and you can't derive insights from it. That is why you must prepare and cleanse your data to ensure its accuracy. The process of finding and correcting flaws, inconsistencies, or inaccuracies in data is known as data cleaning.
Choose a data visualization tool.
Choosing the correct Key Performance Indicators (KPIs) is critical, but so is selecting the right KPI dashboard software to track, visualize, and analyze these metrics efficiently. Several software solutions cater to a wide range of business requirements, including capabilities that improve data visualization, customization, and real-time insights. You might use any of hundreds of different dashboard tools. They differ in terms of cost, number of users, and complexity. There are several data visualization solutions available, including Microsoft Power BI, Tableau, Microsoft Excel, Google Data Studio, Klipfolio and Qlik Sense. Choose a tool that is simple to use and matches your specific requirements.
Design the Key Performance Indicator Dashboard
Arrange your KPIs on your dashboard in an orderly and straightforward manner. Labels, headings, and colours should be used to separate your KPIs by category, theme, or function. You should also rank your KPIs based on their importance and relevance and position them on your dashboard in the most visible and accessible locations. Select the appropriate charts and graphs for your dashboard. The following are great examples of charts you can use on your key performance indicators dashboard:
- Line charts are excellent for depicting patterns of change along a continuum. They are concise, exact, and clear. Because line charts are common to most people, they may be easily studied at a glance.
- One of the most prevalent types of charts is the bar chart. They are an excellent choice for summarizing data that has been divided into groups. These categories are typically represented by a series of horizontal bars that sum the values.
- A pie chart is a chart that presents various data points in a circular pattern. Pie charts aren't always the best option. They get a low precision rating since it is difficult for consumers to compare the sizes of the pie slices correctly.
- Single KPI views can be used to highlight the real value of a single data point. For example, at the top of your dashboard, you can write Year to date Revenue: $2,100,350.00 in bold letters.
Ensure that the dashboard captures the relevant key performance indicators.
KPI dashboards are designed to be monitoring tools. A missing or incorrect chart type could ruin your entire effort. It is crucial to define the type of information you want to portray and then choose an appropriate data visualization. If something critical is not captured, firm executives may miss important changes to which they must respond. However, they should not display irrelevant information. People can only process so much information, and the purpose of a KPI dashboard is to highlight the most important concerns of the organization rather than to answer every query.
Analyzing key performance indicators more frequently gives organizations the information they need to understand what is working and what needs to be improved. Key performance indicators dashboards are the perfect tool for this. By developing key performance indicators dashboards with relevant information, companies can benefit from comprehensive and actionable reporting.