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A Closer Look At Scorecards And Dashboards

by Lyndsay Wise, President, WiseAnalyticsTuesday, April 27, 2010

Both dashboards and scorecards help organizations monitor and manage performance by measuring progress against set targets.  The way they are used, however, and how they achieve these goals differ.  When organizations choose a scorecard or dashboard, they should consider the purpose of use, types of information to be monitored, and the focus on long-term and strategic, versus more immediate goals.  Overall, certain visualizations and the development of key metrics can make it more difficult to distinguish between the two because both might look similar even though they aim to achieve different outcomes. 

In many cases, companies look at implementing dashboards without developing a formal outline of what they hope to achieve and what their goals are.  Consequently, some companies may use dashboards when a scorecard might be more beneficial.  So the question becomes, what is the essential difference between dashboards and scorecards and how do businesses identify which one to use within their organization and when to apply one style instead of the other?

This article discusses the differences between dashboards and scorecards and how they are applied within organizations.  In addition, this article provides a general overview of each to help organizations identify which type of offering better suits their business requirements.

Using dashboards

The use of dashboards is very broad.  Companies can use dashboards to manage sales, employee and call centre (etc.) performance by setting metrics and managing those indicators over time through data visualizations.  In general, though, the formal definition of dashboards includes the identification and management of metrics within an interactive visual interface to enable the continual interaction and analysis of data. 

Organizations use dashboards to get a broad or high-level idea of what is happening within the company, a specific department, or for a specific function.  For instance, within a call centre, managers may want to monitor the time it takes to solve caller issues, the number of calls being handled, levels of service, trends and calling patterns and how that relates to company-wise initiatives, and the like.  For sales, businesses might use maps to identify sales by region or the popularity of specific products within certain geographic areas.  Basically, the key goal of a dashboard is to identify whether performance is on target  - and if there are laggards, it can explain why.  In essence, good dashboards provide organizations with a first glimpse into what is occurring so that decision makers can delve into the cause and effects and act proactively. 

Below shows general examples of dashboard designs to display the diversity of dashboard visualizations.  The versatility of dashboards allows any type of business to identify and manage key initiatives whether they require weekly or intra-daily data updates.  As shown, varying types of visualizations enable quicker decision making by showing charts, graphs, maps and gauges, each with its own metrics management.

Dundas Dashboard Sonatica Performance Dashboard

Dundas Dashboard Tiwon Tech Performance Dashboard

A general overview of scorecards

Scorecards, on the other hand, incorporate the concept of managing metrics and using visualizations while combining this task with overall strategic goal alignment.  A good example is the use of balanced scorecards to manage the organization’s financial metrics with internal business processes, general goals and external factors, such as goals related to customers.  Generally, the scorecard will combine an organization’s overall vision and business strategy by monitoring key metrics based on financial information, customer, general business processes and the overall desired growth.   These factors and the targets associated with them will reconcile to the desired state and alerts can be set up to identify situations whereby targets will not be met to enable proactive actions.
 
In essence, scorecards can be said to integrate application use with the concepts of dashboards.  This means integrating the ability to keep track of execution activities by providing a framework that supports general management functions.  In most cases, scorecard information can be entered or changed within the scorecard to constantly update what is occurring within the organization, while at the same time making sure that the actual numbers and goals set are reconciled to one another.  Overall, businesses adopting scorecards identify what they want to achieve and use the scorecard as a guide on how to get there.

Dundas Dashboard Table

How they overlap

Some organizations may choose to implement both or to create a solution that takes advantage of both approaches.  The ability to develop, manage and monitor

performance metrics and act upon what is occurring within the organization in a timely manner falls within the scope of dashboard use.  Scorecards, on the other hand, take a more long-term approach.  Scorecards take the metrics and identify how they interrelate with overall corporate targets and manage that process over time.  Although dashboards also look at performance indicators over time, in many cases, organizations use dashboards to identify what is currently happening within the business and to make sure that day-to-day operations stay on track. 

Adopting a combined approach

The ability to use dashboards for immediate or short-term monitoring of processes - while supporting longer-term initiatives using scorecards to align shorter-term goals with the overall strategic management of the organization - provides a good way to get the most out of managing a company’s metrics.  When businesses consider one versus the other, it becomes important to note that even though each stands on its own and provides the company with value, the combination of both dashboards and scorecards give businesses additional insights into both current and long-term business initiatives and how each ties into the overall strategic goals of the organization.

About the Author

Lyndsay Wise is an industry analyst for business intelligence. For over seven years, she has assisted clients in business systems analysis, software selection and implementation of enterprise applications. Lyndsay is the channel expert for BI for the Mid-Market at B-eye-Network and conducts research of leading technologies, products and vendors in business intelligence, marketing performance management, master data management, and unstructured data. She can be reached at lwise@wiseanalytics.com. And please visit Lyndsay's blog at myblog.wiseanalytics.com.


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Discussion:

John Munoz said:

Thank you for the post Lyndsay.
As a dashboard designer myself, it's always interesting to hear what other experts in the industry are thinking.
I wonder what other experts think of the two dashboards you displayed. You say the two dashboards 'display the diversity of dashboard visualizations', and that 'As shown, varying types of visualizations enable quicker decision making by showing charts, graphs, maps and gauges, each with its own metrics management.'
Varying types of visualizations aren't necessarily a good thing. Better would be a limited set of visualizations (line, bar, and bullet) with proper defaults and that are easy to read.
I find little in either of the two dashboard examples you chose to show that would enable quicker decision making. For quicker decision making you need context, and the visualizations that these two dashboards use--pie charts, gauges, and maps--and the lack of context the metrics are put in, makes them poor choices to inform.
The line charts you show to provide some context in that they compare expenses and revenue this year compared to last year. To be even more insightful and easy to read, perhaps they could present those two measures as a ratio.

John C. Munoz

Steve Bogdon said:

Thank you for your comments John. The dashboard examples shown in this article are simply sample ones from one of our sponsors and are not the actual dashboards that were sent with this article from Lyndsay. Before we publish anything we need permission from the owner of the work, in this case we did not. If you have more appropriate examples please feel free to send them to me and I can use them in this article.

Also your dashboard examples are always welcome for inclusion in our dashboard gallery.

Steve Bogdon
Dashboard Insight

Wayne Morris said:

Lyndsay
Good post and I agree that a combined approach is very beneficial. I wrote a blog about this here and would have referenced your post had I seen it earlier. http://bit.ly/a5U18E

Wayne Morris, myDIALS

Aleksey Savkin said:

Lyndsay, great research! I did my own research that was published here: "What’s the difference between a Dashboard and a Balanced Scorecard?" http://www.bscdesigner.com/whats-the-difference-between-a-dashboard-and-a-balanced-scorecard.htm

I suggest to build a dashboard over a Balanced Scorecard strategy map. In this way one can have a vital strategic information (cause and effect connected business goals), as well as important KPIs.

What do you think?

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