Content area
Full Text
Timely information on operations and the competitive environment are essential for the successful implementation of a business strategy. Dashboards have become a popular tool for giving users better access to crucial information in a way that doesn't overwhelm them. One trend is to implement dashboards to improve an entity's performance reporting system at the strategic and operational levels. Users are considering a wide range of dashboard development tools and techniques; for example, dashboard tools can use basic Microsoft Excel features or more specialized software to process company data into actionable information.
What Are Dashboards?
Many different types of dashboards exist. Essentially, a dashboard focuses on a goal or objective, and it displays the most relevant information on a digital screen. An effective dashboard utilizes visualization techniques and cues to engage a user in the information processing experience. The visual techniques may include the use of colors, dials, buttons, graphs, and the positioning of information on the screen. (A good example of a simple financial analysis dashboard, which can be used to examine complex data for periodic planning, can be found at http://resources.businessobjects.com/support/cx/ samples/download_45/financial_analysis_calculator/financial_ anal ysi s_calcul ator. swf). Buttons are used to change the inputs to the break-even analysis model. Dials show the output data, such as margin per unit. The resulting graph illustrates cost-volume-profit relationships. A user can even perform a sensitivity analysis by manipulating the sliders to change the values of key financial inputs and test multiple scenarios.
A dashboard should enhance a manager's ability to process information and take action. For example, a CEO's responsibility is the successful implementation of a business strategy; thus, the CEO's dashboard should include performance measures (key performance metrics) associated with strategic goals. Traffic light icons, for example, can be used on the dashboard to provide cues to signal variations from performance measure target values. A red light attracts the greatest attention for a significant undesirable deviation from target; the red cue will remain on the dashboard until the company is back on course. A yellow light indicates caution for smaller deviations, or a trend toward a significant deviation, from a target. The potential benefits of dashboards include improving the entity's ability to quickly monitor progress in achieving goals, enhancing efficiency in responding to business events, and...