Contrary to first impression, an “executive dashboard” is not found in a
CIO’s car. Rather, an executive dashboard, also known
as a manager dashboard, executive cockpit, or digital cockpit, is a child of
what in the 1980s was referred to as the Executive Information System (EIS).
These systems, and their web-based progeny, all have the same goal: bringing
critical information to decision makers and improve the performance of their
“Companies are finding it’s much better to allow a manager to make an
immediate decision in response to a market opportunity than to force him to
wait for the CFO…“
Who uses them and why?
An executive dashboard (referred to as “dashboard” for the rest of this article)
is an intranet for a select group of users. These users tend to be
executives—VPs and above, the people who are the main decision-makers in the
However, not all new dashboards are for executives and their ilk. As
organizations push to become more nimble (and hence more competitive),
dashboards are now being developed for managers of all stripes. When developing
a dashboard, don’t be surprised if you hear phrases such as: “Every employee a
CFO.” These reflect a realization by companies that
faster decision-making helps them succeed. This means giving managers the
ability to make decisions on their own. Companies are finding it’s much better
to allow a manager to make an immediate decision in response to a market
opportunity than to force him to wait for the CFO, or
some other executive, to be alerted to the opportunity and then make a decision.
A dashboard supports a manager or executive by doing three things:
- It answers fundamental questions about the business or business unit.
The dashboard should answer basic business questions: fundamental questions
about the health of the business that can be financial, operational, or
comparative in nature, such as:
- Did I reach my sales numbers this month?
- How many widgets did we sell in China last year?
- How many widgets are we producing per month at the Chicago factory?
- How often do employees call in sick at our Miami store? On what days
are they most likely to call in sick?
- Is revenue growing on a month-to-month or week-to-week basis?
- How am I doing in comparison to my competitors?
These sorts of questions can often take a full-time administrator and
several spreadsheets to answer. Currency of information is important, but
not as important as having the right information.
Each particular executive or manager will have their own statistics
(called Key Performance Indicators, or KPIs) that are important to them, but
often companies will also have a standard set of measures that has been
applied across the organization. This eases comparison of managers and
executives to one another. Basic KPIs can be combined to form a scorecard,
and organizations that have a scorecard likely will want it to be a part of
- It alerts the user to issues or problems in such areas as production,
sales, and revenue.
Closely related to the first point, a dashboard should alert the executive
or manager when something goes wrong. How an “alert” is defined is based on
the needs of the business. Some example alerts would be:
- A product defect rate is going above an acceptable level.
- Absenteeism is becoming a problem at a particular store or factory.
- Average delivery time is falling below normal.
- Sales targets are not being met.
- Operational expenses are growing beyond an acceptable rate.
Every dashboard needs to have an alert system that communicates when a
critical figure has been passed or is about to be passed. In this case,
currency of information is extremely important.
- It helps make decisions that impact the business.
Finally, the executive or manager will use the information from a dashboard
to make decisions. Sometimes these decisions can be very straightforward and
can be answered by a single KPI, but more often
business decisions will be complex and require a variety of inputs. Examples
of these decisions are:
- Do I increase or decrease production?
- Do I need to change my product mix to be more competitive?
- Should I close shop in Des Moines?
- Do I need to hire more salespeople?
- Why is the business not growing as fast as planned?
These types of questions require the ability to explore a series of KPIs.
Also, they require drilling down into figures based on time or region, or
selecting and comparing variables. In this case, it is important that the
information is presented in a way that helps the executive or manager come to a
conclusion about the issue they’re confronting, and construct a rationale to
support the decision they make.
The backbone of the dashboard
The heart of any dashboard is the KPI. KPIs can
measure all sorts of things, such as:
- Inventory levels
- Monthly gross profit
- Sales revenue by business unit, by product, by region
- Revenue forecasts
- Top customers
- Number of consultants engaged
- Accounts receivable
- Employee attendance rates
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