As your business grows, so will your data and your data sources. Manual reporting and KPI tracking becomes difficult and time-consuming, making dashboards a necessary tool to visualize performance data, share reports and make decisions for continuous improvement. A KPI dashboard aggregates data and presents that data into digestible charts, graphs and other visual representations to allow for KPI tracking in real time. These dashboards can range in degree of sophistication and granularity, but it’s important to understand key components, best practices and the types of tools that can make your KPI dashboards the most effective.
The Impact of KPI Dashboards on Decision Making
Enhanced Strategic Planning
KPI dashboards provide visualizations of the data that can aid in strategic planning and long-term goal setting. They allow you to look at information at a glance, decide on which KPI to focus on first, and then base your strategies off of the provided metrics.
Improved Operational Efficiency
A top issue that companies face is having transparency in operations. KPI reporting allows you to gather real-time data from every area of your operations as the KPI dashboard places the data in a visually appealing way to improve operational visibility. This in turn can boost efficiency and productivity. For example, one way to streamline visibility is with different levels of reports.
“You need your summary level report, and you need your detail level report. And they need to be connected,” says financial analyst Malisa N. In this manner, you have the summary level report to provide the big picture of operations, and then the detail-level report to drill down on the specifics.
Timely Risk Management
By gathering your performance metrics into a KPI business dashboard, you are given a snapshot regarding the current health and stability of every department. You also can use the dashboards to check for anomalies by comparing historical trends. Then you can analyze the risks and develop mitigation plans before they develop.
Components of a KPI Dashboard: Choosing KPIs & Customizations
Keep in mind that a KPI dashboard isn’t just a list of metrics. It’s a tool that helps display the curated data in a way that allows decision makers to evaluate the information, compare it to a set of parameters or benchmarks, and then act on the information to improve performance.
Types of KPI Dashboards
A KPI dashboard is often specific to your operations. It isn’t a catch-all for all metrics throughout the enterprise. Rather, you’ll have one dashboard focused on sales, another on marketing, and so on. Some KPI dashboards used in business management include the following.
- Executive dashboards for high-level snapshots of company performance
- Operational dashboards for reporting on inventory, production and productivity
- Sales dashboards for an overview of sales growth, conversion rates and revenue
- Finance dashboards on financial sustainability and stability, e.g., burn rate, profit & loss or company cash flow
- Marketing dashboards on campaign performance, including metrics on lead generation, website traffic or cost per lead
KPI Dashboard Examples
To illustrate the different types of KPI dashboards, here’s a table featuring examples of sales and operational dashboard metrics:
| Sales Dashboard | Operational Dashboard |
| – Current period revenue – Comparison to previous periods | – Measure of equipment productivity, quality and availability |
| – Percentage growth compared to previous periods – Year-over-year growth | – Percentage of orders delivered on or before the promised date |
| – Percentage of target achieved – Comparison of actual sales to target | – Number of times inventory is sold and replaced in a given period |
| – Percentage of leads that become customers | – Percentage of products that pass quality inspection without needing rework |
| – Percentage of customers retained over a given period | – Output per employee or labor hour |
| – Average amount of revenue generated per customer | – Total production costs divided by the number of units produced |
KPI Dashboards Can Cover Quantitative & Qualitative KPIs
While there are different types of KPI dashboard examples, each one will feature some essential metrics when it comes to creating reports and making decisions. Since every business is different, these metrics will be tailored to your specific business needs.
- Quantitative KPIs: Quantitative KPIs are the measurable numbers that demonstrate performance. It could be revenue, average value order, inventory turnover or cost per acquisition.
- Qualitative KPIs: Qualitative KPIs involve an interpretation of the data that may not involve actual numbers. These may include employee or customer satisfaction levels or brand reputation analysis.
- Leading KPIs: Leading KPIs indicate future performance of an operation and help identify opportunities or risks. That may include sales pipeline value or new product development progress.
- Lagging KPIs: Lagging KPIs evaluate historical data to identify areas for improvement or to compare performance across different periods. These can include monthly revenue figures or customer retention rates.
Consider Customization Options
A KPI business dashboard allows customization for different departments, roles or industries. These features allow you to differentiate between different aspects of your operations to make metrics more readily identifiable.
You’ll have several software providers and design choices to consider. For instance, some suggest color coding KPIs to goals, with red indicating latency and green indicating that you’re on target.
A KPI dashboard can also feature different customizations for a CEO versus one reserved for the marketing or sales team. There will be aspects that each group will be interested in. You want to highlight the data that is most important so people can better interact with the information as well as retain it for later use.
Visualization Techniques
You can also customize the dashboard to make it more engaging depending on the audience. You may enlarge graph data, use contrasting colors to categorize items and place information in a hierarchy based on importance.
Fully utilizing graphs, charts and heat maps can take metrics or numbers that are confusing and make them more simplified. These techniques can help everyone be on the same page regarding the data, especially board stakeholders, so they can make proactive decisions.
How to Choose the Right KPI Dashboard Software
Selecting the right software or platform to create your KPI dashboards is crucial for effective data visualization and reporting. When evaluating different options, consider the following factors:
- Ease of use: Look for a platform with an intuitive user interface that allows you to easily create, customize and share dashboards without extensive technical knowledge. For example, Microsoft Power BI provides a user-friendly interface for creating interactive dashboards.
- Data integration: Ensure that the software can connect to your existing data sources, such as databases, spreadsheets or cloud applications, to streamline data collection and updates. Platforms like Tableau offer wide-ranging data source integrations.
- Customization options: Choose a platform that offers a wide range of customization features, such as chart types, colors, layouts and branding elements, to align with your specific needs and preferences. Google Data Studio, for instance, allows users to create and share interactive dashboards with customizable elements.
- Collaboration and sharing: Consider software that enables seamless collaboration and sharing of dashboards among team members, stakeholders and clients. Looker, a cloud-based platform, combines data exploration, visualization and reporting capabilities with a focus on collaboration.
- Scalability: Select a platform that can scale with your growing data and reporting needs, accommodating increased data volumes, users and complexity over time. Domo, an all-in-one business management platform, offers scalable solutions for real-time data visualization and personalized dashboards.
- Security: Prioritize software that offers robust security features, such as user access controls, data encryption and compliance with relevant industry regulations (e.g., GDPR, HIPAA). Many leading KPI dashboard platforms provide advanced security measures to protect sensitive data.
Best Practices for KPI Reporting
When tracking and analyzing your KPIs, you want to make the most out of your reporting for successful results. You want to shore up your data practices, since a business dashboard is only as good as the data that goes into it. “Many companies need to go back to their data sources to validate the accuracy of the information they are analyzing,” says fractional accountant Keri J.
Perform Regular Monitoring and Updates
Data can become irrelevant very quickly depending on the future direction that the company may take. It’s important to engage in regular monitoring of data and update the KPIs to keep them relevant.
Set Realistic, Focused Targets
Realistic targets are actionable. They provide a clear set of steps to take for the benefit of the company. When creating your dashboard, be specific and realistic—think five or six KPIs total—and choose which KPIs to report based on the most relevant information you need now. If optimizing cash flow is a major concern, focus on the most relevant information, such as revenue, profit margins, acquisition and operating costs.
Maintain Data Integrity and Controls
Accurate data leads to actionable results. If the data is incorrect, it could lead to wasted time without achieving desired goals. To maintain data integrity, ensure that only authorized personnel can make changes to the information. Also, these changes must be made based on a set time frame. These tactics ensure that you are working with the most current metrics.
Build an Effective KPI Dashboard With the Help of an Expert
KPI tracking and dashboards provide you with the tools and methods to make proactive business decisions. They bring more visibility to operational data and break it down using customization and visualizations that are more readily understandable. By implementing these tactics, you can put your business in a better position to strategize for the future.
If you are interested in taking your business to the next level with data visualization tools, KPI dashboards and BI reporting, reach out to Paro’s elite community of remote finance experts for a consultation. We provide strategic guidance and data analysis to help your business grow stronger.
