Why use dashboards?
Those best placed to answer the question of why a business would implement dashboards are the companies who are in the process of implementation, or those who are already seeing the benefits. To find out what was motivating those who were considering adopting, or had already introduced, dashboards we contacted our leads and customers and asked them!
When speaking to managers we found four common reasons for implementing dashboards:
Adding meaning to data
As technology develops businesses find they are acquiring an ever escalating amount of data. Any business, especially in the midst of loyalty schemes and web analytics, will collect reams of potentially lucrative data; from click through rates, to the number of tins of beans sold in Grimsby on a Tuesday afternoon. The data is all being collected, just sitting in repositories, waiting to be utilised. We are capable of collecting more data than ever before, yet the ability of the human brain to process and analyse such data is limited. Data in its raw form is often meaningless.
Is it really useful to know that on June 23rd 2010 there were 570 squidgets sold? In isolation, no. That figure needs to be compared with something, be it targets, average, or some kind of industry benchmark. Dashboards provide data with that meaning, giving an instant insight into business performance, without somebody having to sit and analyse by hand. If on June 3rd the dial on your dashboard turned red, or the line on your graph moved into the danger zone there would be an instant recognition of the significance of that 570!
Cost and error reduction
The obvious cost saving with dashboards comes from the man hours saved from manual data collection and analysis; but the real time nature of dashboard technology means they are also able to save businesses money in a less obvious, but much more significant, way.
Real time data analysis occurs during the course of the business that actually generates the data, and not three months afterwards, as is so often the case. Decision makers can be alerted to anomalies as they happen, giving them the ability to rectify the problem before it has chance to escalate. Wouldn’t it be more useful to know the second there was an abnormally high proportion of defects? It may be that there is something caught in a machine, or that a member of staff needs more training. Whatever the problem, it will certainly be easier to discover the cause and put it right at the moment it transpires; rather than agonizing over the poor results when analysing the quarter three months later. A lot can happen in the time span between the event and the analysis, the object caught in the machine could have cost the business thousands in easily prevented defects.
Integration
Businesses structures are becoming increasingly complex and diverse, with increasing product lines, divisions and operations in more countries than ever before. Dashboards allow increased coordination of all the various elements in a business by providing them with a means of sharing their performance in a universally understood way. It allows all departments to easily understand how their performance contributes to the success of the entire organisation. In business it will always be easier to aggregate multiple pieces of data than multiple viewpoints!
Visual
It seems that when it comes to data appearances really do matter. Financers, potential customers, suppliers and those higher up the chain of command, are found to have more confidence in data that is presented in an attractive matter. Small details like the automatic shading on graphs, or shadows and highlights on dials, show care and attention that viewers then assume permeate through to the underlying data.
At the end of the day, research suggests that the more visually attractive data is, the more likely people are to actually bother to use it.