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Oct 19
2009
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You may be familiar with DashBoards and KPIs or Key Performance Indicators - a term beloved of big consultants. You may even have seen those expensive software packages that purport to gather key criteria and display them as pretty speedo dials and traffic signals. A speedometer dial works fine in your car - it tells you how fast you are going. It can't, however, tell you how fast you have been, or will be going, or your relative speed to other competing cars. It can't relate your speed to other aspects of your car's perfomance. When you translate it to a business report, it's just a fancy way of showing ONE data point of information. ONE data point.
I believe dashboards are a superb tool for smaller companies to monitor the workings of the business. But I like to use small graphs that can depict a rolling 13 months history against a target. Using this technique I can pack as many as 20 graphs on a page depicting over 500 data points in an easy to use format.
Some of the many benefits of my Dashboards are:
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They can quickly highlight underling trends and connections between data that you might not find with hours of studying traditional reports.
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They reduce the piles of paper reports that take time to produce and rarely get read by the people who need the information.
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They quickly communicate activity across the organization and can be used to monitor cash, financials, sales, purchases or non financial metrics such as environmental variables or customer service measures.
Let's take a look at some examples. The first one is a weekly Cash Dashboard. I use this chart to display 14 different KPIs including Sales Trends, AR and AP management, Incoming and Outgoing cash, Line of Credit availability and much more. In total it shows about 400 data points on one page. I can use it for projections as well to quickly see what my client's cash needs will look like in a month or two.
Another example is a Sales Dashboard. This graphically provides information on a company's top customers, showing monthly and YTD figures, as well as growth. It also shows the sales trends over 13 months against a budget or the prior year for all customers. I customize this directly to my clients' needs, and it can be supplemented by other sales target information to support the sales management activity.
A final example shows a company's Financials Dashboard. In this chart I have extracted key figures from a manufacturers income statement, balance sheet and cash flow and show the information in table and graphical form. A perfect way to quickly summarize recent trends, make connections between key figures and provide early warning signs of declining performance.
In three pieces of paper I have presented about 1,400 data points, with a very easy way for a business owner to stay on top of key indicators of progress. I use this same technique to monitor purchases, loan covenants, production factors, employee utilizations in professional firms and many other situations.
So there are the facts - almost 1,400 of them. The next time your company needs usable intelligence fast call for the expert on Dashboarding. David Kirkup, Partner with B2B CFO , will quickly get you up to date. Call him on 404 348 0326 or dkirkup@b2bcfo.com.
