In 2004, I began research for a book titled Performance Dashboards: Measuring, Monitoring, and Managing Your Business (John Wiley & Sons, 2005). It took many hours of thought, dozens of interviews, and thousands of words to piece together the puzzle of dashboards and scorecards in a way that provides a clear and complete picture without distorting current perceptions that people have about these systems. In highly abridged form, what I came up with is this: dashboards and scorecards are part of a larger performance management system—which I call a performance dashboard—that enables organizations to measure, monitor, and manage business performance more effectively.
A performance dashboard is more than just a screen with fancy performance graphics on it: it is a full-fledged business information system that is built on a business intelligence and data integration infrastructure. A performance dashboard is very different from plain dashboards or scorecards. The latter are simply visual display mechanisms that deliver performance information in a user-friendly way, whereas performance dashboards knit together the data, applications, and rules that drive what users see on their screens.
1. Failing to Apply the “Three Threes”
Every performance dashboard appears and functions differently. People use many different terms to describe performance dashboards, including portal, BI tool, dashboards, scorecards, and analytical application. Each of these contributes to a performance dashboard, but is not a performance dashboard by itself. Here is my definition:
A performance dashboard is a multilayered application built on a business intelligence and data integration infrastructure that enables organizations to measure, monitor, and manage business performance more effectively.
This definition conveys the idea that a performance dashboard is more than just a screen populated with fancy performance graphics: it is a full-fledged business information system designed to help organizations optimize performance and achieve strategic objectives.
Despite the wide variation among performance dashboards, each shares three basic characteristics—the “three threes,” as I call them. (If they don’t, they are imposters that will not deliver long-lasting business value.)
Three Applications. Each performance dashboard contains three applications woven together in a seamless fashion: a monitoring application, an analysis application, and a management application. Each application provides a specific set of functionality delivered through a variety of means. Technically speaking, the applications are not necessarily distinct programs (although sometimes they are), but sets of related functionality built on an information infrastructure designed to fulfill user requirements to monitor, analyze, and manage performance. (See Mistake 3 for more details on each application.)
Three Layers. Perhaps the most distinctive feature of a performance dashboard is that it consists of three views or layers of information: a monitoring layer, an analysis layer, and a detailed information layer. Just as a cook might peel layers of an onion, a performance dashboard lets users peel back layers of information to get to the root cause of a problem. Each successive layer provides additional details, views, and perspectives that enable users to understand a problem better and identify the steps they need to take to address it. (See Mistake 4 for more details on each layer.)
Three Types. The last thing you need to know about performance dashboards is that there are three major types: operational, tactical, and strategic. Each applies the three applications and layers described above in slightly different ways.
The “three threes” is a shorthand way to remember the key features of a performance dashboard when you are evaluating commercial products or building your own.
This article excerpt appears courtesy of TDWI and originally appeared in TDWI’s Business Intelligence Journal, a Member only publication. To learn more about Membership and how to access additional articles please visit www.tdwi.org.