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Today’s Measurement Dashboards
Away from Rudder-and-Stick

by Gary Cokins, Consultant, www.sas.comMonday, March 9, 2009

Everything matures in stages. Larvae mature into butterflies. Babies grow into kids and then grow into people like you. Information systems also advance through stages of maturity.

For example, the earliest accounting system processed payroll, purchases for accounts payable and invoices for customer accounts receivable - and then dumped all these transactions into a general ledger bookkeeping system. Today the system can precisely measure customer profitability for individual customers and integrate that information with marketing systems. This helps sales and marketing target the types of customers to retain, to grow more quickly, to win back and to acquire. And which types not. Then, the system can suggest what profit-lift actions to take, tailored for each customer.

The reporting of performance measures has advanced through its own stages of maturity. The display of performance information for control has advanced from the old Red Baron single-engine triplane with rudder-and-stick control to today’s Airbus-style jet navigation. The cockpits are certainly different.

A Federal Computer Week article, Positive Outlook for Dashboards, describes advances in the visual display of information. A good example in the article is the US Coast Guard, which for decades has been perfecting the skill of navigating the seas. Now, the Guard is learning and improving competencies to quickly observe relevant information from visual dashboard displays (such as alert messages - and rapidly drill down and mine the information) to understand what is happening, what may be causing any exceptional outcomes. Dashboards are not just about monitoring dials, they are about moving the dials.

But there are more applications for dashboards. In the same article, the Coast Guard describes how project managers can distinguish organization-wide trends, such as a widespread skill shortage, from isolated cases. They can identify projects completed ahead of schedule and more quickly shift the unused funds to the next, higher priority. With business intelligence technology embedded in the dashboard software, they can identify exactly what that “next best” priority is using rule-based weighted factors that human intuition could not accomplish.

This type of at-a-glance observation, diagnosis and problem resolution is every manager’s dream; however, there are some perils that accompany the promise of dashboard technology. What if the input data contains an error or is in other ways flawed? A higher stage of dashboard maturity includes front-end data management technology. And what if the IT department only configured the dials to what has historically been or can be measured rather than what should be measured? A higher stage of dashboard maturity draws on systems thinking and cause-and-effect analytical modeling to understand how the impact of upstream outcomes impact downstream ones.

By starting with timely and in some cases near-real-time feedback, coming from well-designed dashboards embedded with analytics, small problems can be detected before they become major and costly ones. Fire quickly spreads if not contained early.

About the Author

Gary Cokins is a strategist for SAS, a market leader in data management, business intelligence and analytical software. He is an internationally recognized expert, speaker and author on advanced cost management and performance improvement systems. He is the author of five books, An ABC Manager's Primer, Activity-Based Cost Management: Making It Work, Activity-Based Cost Management: An Executive's Guide (Wiley), Activity-Based Cost Management in Government and his latest work, Performance Management: Finding the Missing Pieces to Close the Intelligence Gap (Wiley). You can contact him at gary.cokins@sas.com.

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