Scenario ID: SC515
Executive leadership has access to an online reporting cockpit and/or dashboard that provides a timely view into pre-defined set of key metrics on a daily basis
Executive leadership needs to make timely and accurate decisions. In order to do this effectively they need data that can help to guide them down the right path. Data provides the opportunity for management to make better decisions that are based on real facts. In 2012 Ernst and Young commissioned a study which found that 81% of executives stated that they needed to improve decision making speed and level of insight. Data can help to achieve this. According to Foster Provost and Tom Fawcett, data-driven decision making is the process of focusing on data to make decisions rather than simply relying on intuitive feelings, and there definitely needs to be a balance of the two to be able to make solid decisions. Additionally, a problem that Ernst and Young discovered was that companies focus too much on unstructured data and make decisions on this basis.
The advent of “Big Data” is making data to assist with the process increasingly possible. However, it is also adding increasing layers of complexity as there is so much data it can be difficult to determine what is important and separate that out from what is not. Ernst and Young suggest that best practice indicators may include data on the market, competitors, operational and financial metrics. All of these need to be carefully quantified so that figures actually show what executives think they do. One of the challenges with this can be communicating between technology and management regarding what is needed, so that technology understand precisely what is needed and can create a dashboard that provides appropriate and meaningful figures.
Data can be overwhelming and best practice from Ernst and Young suggests that less is more, with a focus on specific data rather than trying to have a dashboard that includes everything. With best practice data management, getting this data automated throughout the entire process so that no manual interventions are required to update the dashboard is of paramount importance. If there is a need for manual intervention then there is a good chance that at some point this will fall down, leaving management presented with out of date figures on which to base decisions.
For each organization, the precise data presented in the management dashboard will be different. Following the process of defining the specific decisions that executives need to make and reviewing the questions that they need answered will help in defining the data that goes into the dashboard. It is important to consider the context that the data will be analyzed in and how the data will be used to make sure that it can be presented well for the end user. When creating a dashboard, considering the amount of time that users will have to look over the figures presented will also be important so that the focus is right. Good executive dashboards will help executives to see progress towards achieving strategic goals, make sure that certain actions are taken exactly when they need to be and will help to highlight problems and issues that are occurring.
Dashboards should also take into account the scope and range of data needed. In most cases there may be a need to focus on particular functions such as sales, deliveries, revenues, production and others. With ecommerce or web based businesses a view of number of visitors, bounce rate and number of pages/time per visit are all considered to be best practice metrics. In good dashboards it is possible to see historical data so that trends and patterns can be reviewed, data in a snapshot allowing a view of a set point in time, real time data as it happens, and data that can predict what will happen going forward into the future. In defining the data to be included the organization needs to ask how the data will add value to the organization and how it will be used to make decisions. This will approach will be sure to lead to a dashboard that meets daily organizational needs.