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How To Build a KPI Dashboard That Delivers Insights and Drives Results

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Data drives business today.

That probably doesn't come as a surprise for anyone reading this. Over the past decade, more and more organizations have pursued the goal of becoming data driven. Still, many continue to struggle--looking for ways to extract meaningful and actionable insights from the increasing amounts of data that have become available to them.

But having a way to connect and visualize data helps achieve meaning from it, making it easier to get to the insights that matter. And that's where KPI dashboards come in.

By activating and automating the right KPI dashboards, you can play an important role in helping your business become more data driven. But building a successful KPI dashboard means understanding your data and the most relevant key performance indicators (KPIs) for your business. Only by focusing on the KPIs that truly matter will you be able to set your organization up for success and turn your data into actionable insights.

Thankfully, today's improved access to operational data means it's more possible than ever to identify, measure and visualize the leading indicators that truly matter--and build KPI dashboards that turn your data into results.

What Is a KPI Dashboard?

Dashboards are a powerful data visualization tool used to track metrics and KPIs across your business--from financial and operational metrics to those that look at sales and marketing, HR and customer success. They communicate your performance against your strategies and values and track the ongoing health of your organization, pulling from multiple data sources to offer a single view. In doing so, dashboards help you leverage your data to drive your business forward, facilitate collaboration and transparency and communicate performance to your executive team and organization as a whole.

All of that enables you to determine where your organization is and where it might be going, letting you develop useful insights around the metrics that matter. By showing those KPIs in real time, dashboards also let you stay on top of both leading indicators that demonstrate your company's health and performance, as well as actual results--so that you can course correct as needed when you're going down the wrong path.

But while a large number of companies today use KPI dashboards in some form, creating them is just the start. Whether you get the insights you need will depend on how you're using them, what they look like and the KPIs you're choosing to follow.

So how do you build a KPI dashboard that successfully helps you move towards your performance goals? You start by choosing the right KPIs. And that begins with data.

Assessing Your Data

Choosing the right metrics to follow is critical to your dashboard success. Your list of KPIs should be specific to your business goals and objectives and come from conversations with your team and any other stakeholders involved. Ideally, your KPIs will link your organization's strategy and goals with the people and processes you have in place.

The best KPIs will also be built on timely, accessible and accurate data. And with the advent of data technology and analytics, finance teams today can access and measure KPIs in a way they never have before.

After all, since you'll have more access to data, you'll be able to pick from a better array of KPIs. Modern data science and data warehousing mean more information to work off of and better points of comparison by which to judge performance. Business intelligence and new data strategies also make it possible to dive deeper to get to more attuned insights and to present your results using superior reporting. All of which contribute to better-informed decision making.

And if you don't have the data you need today, there's no reason to think you won't have it in the future. Identifying your gaps is still a step forward and a way of building transparency on where your data may be lacking--and where it might be improved with some investment of resources. That's an important step too, leaving you with more insight into how to create visibility into your blindspots.

Defining Your KPIs

With so much data available, you may have more KPIs to choose from, but you still only want to focus on those most relevant to your organization. When narrowing down the field and defining your KPIs, consider two questions:

  1. What insights will move your business forward? The KPIs that you choose will be the ones you'll want to measure and learn from--which means you should choose the metrics that will best help your business reach its goals. When identifying your KPIs, consider what you already know (your "known knowns") and want to dig into further, as well as what you recognize you don't know (your "known unknowns") and want to better understand. But keep in mind that the very best KPI dashboards will also offer intelligence and frame your data so that you can ask questions of them and keep your fingers on the pulse, in order to identify your "unknown unknowns"--the things you don't even know you don't know--and let you stay proactive.

  2. Who should be seeing those insights? Your KPIs will also be tailored to the audience that will use your dashboards--whether that's your immediate financial team, your executives or some other group.

While your KPIs will be unique to your industry and organization, some popular financial and operational KPIs include the following:

Popular Financial KPIs Popular Operational KPIs
Operating cash flow Units sold/customer count
Operating expense New and recurring revenue
Current ratio Transactions (quantity, average value, frequency)
Net profit margin Product line profitability
Net profit or EBITDA Employee satisfaction
Working capital Employee turnover
Receivables and payables aging Revenue growth
Inventory health Sales by region/team member
Sales growth Brand exposure/impressions
Return on investment Return on ad spend

Hone your list so that it's right for your specific business and audience. You'll also want to make sure everyone has a clear definition of each KPI and your objective in measuring it.

KPI Best Practices

When defining your KPIs, there are a few more best practices to keep in mind:

  1. Always include a comparison point. You need something you can measure against--whether it's past performance or something else. If there's no comparison available, it's not going to work as a KPI. After all, if you can't measure it against something, what's the use of following it in the first place?

  2. Have some variety. Try to assemble a mix of strategic and tactical KPIs, operational and financial KPIs and present- and future-facing KPIs--sales orders placed versus pipeline performance, for instance--to help you get a full view of your organizational health and performance.

  3. Don't go overboard. Choosing too many KPIs makes it difficult to keep an eye on any one too closely--making your KPI dashboards less effective. While there's no "right" number of KPIs to keep up with, between five and 20 is considered the sweet spot by many CFOs.

Once you've got your list of KPIs, building a dashboard is about telling a data-driven story around them--turning data into insights in a way that's easy to follow and turn into action.

(Check out The Ultimate Guide to Financial Reporting to help you better understand your company's financial performance.)

Building Your Dashboards

The best dashboards not only talk in a language your target audience understands, but communicate in real time to let you make decisions in the moment. And all of that should be easy to use, engaging and accessible to your stakeholders--because if it's difficult to access the insights on offer, nobody's going to bother.

So how do you build dashboards that get noticed? Here's a step by step:

Step 1: Gather your data.

This will likely involve different data strategies and services to access the sources you need, as well as the implementation of automation tools and working with team members to ensure you're implementing the right data for your list of KPIs. You may also need to scrub your data to get to what matters so you can build out better data visualizations.

Step 2: Map out your data.

Understanding how your data feeds into each KPI will be key to understanding whether you have all of the information you need to measure the metrics that matter--and will let you ensure you're measuring each metric correctly.

Step 3: Choose your technology.

You'll want a tool that displays your dashboards in a way that's visual and dynamic so that you're engaging even those outside your immediate team. The technology you choose should give you a big picture view of performance, preferably in a single view, while letting you drill down into greater detail to find out more about specific metrics when you choose to and ultimately to easily look at the raw data itself.

Step 4: Build your dashboards.

With your KPIs defined, the data to support them in place and your technology set, everything is ready to build out your dashboards. When doing so, always keep in mind the goals you hope to achieve and the audience you're catering to, as well as the information you want to display. While there are commonalities among dashboard styles--a four-quadrant dashboard, for instance, is a popular choice--every dashboard should be unique and designed specifically with those factors in mind.



But the work doesn't stop once your dashboards are built--there's still more you can do to ensure you're getting everything you can from them.

What Comes Next?

Even when your dashboard is done, it's not really done. To achieve your best results, you'll want to continue optimizing and improving it, to ensure you're telling the best possible story and getting to the insights that will actually improve your business. To accomplish this, consider the following:

  • Get feedback. For a dashboard to be successful all your stakeholders need to want to use it. To ensure that's the case, go straight to the source and ask everyone involved for their feedback--then make tweaks as necessary based on their response.

  • Deploy and distribute. Keep your dashboards visible so that everyone involved has an ongoing view of performance. Whether you email your results in report form, offer direct access to your dashboards or keep them on display in a public place, you'll want to make sure all of those relevant stakeholders stay in the know. That way everyone will be working towards the same goals--and know where you stand in achieving them.

  • Actually use them. This may seem like a no-brainer, but it's not unusual for organizations to fall into the trap of creating dashboards but never using them, then wondering why their dashboard efforts proved so ineffective. To see results, you need to integrate your dashboards into the way you work as an organization--bringing them out in meetings, company reviews, etc. The more you're speaking from a single source of truth, the more value your dashboards will offer.

  • Keep innovating. New machine learning technology and predictive algorithms are introducing fresh opportunities for next-level dashboards that look ahead as well as back, with predictive and prescriptive indicators that promise to give a clearer view into future performance. Technologies like these promise to add new insights to your dashboards and keep you ahead of the crowd--so don't be afraid to test them out and add new innovations when appropriate, to constantly aim for better results.

Finally, as you move forward, keep an eye on the KPIs you're looking at and always ask yourself whether they're still the right metrics to tell your story. If they're no longer effective in helping you meet your goals, it may be time to reevaluate and replace them--and start building new dashboards around your new goals. After all, evaluating your dashboards is just another form of measurement in itself--and part of being a successful data-driven business.

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About the Author

Evan Webster, Senior Area Sales Manager, Vena

Evan Webster is an experienced sales professional and storyteller with a passion for innovative technology. He currently serves as a Senior Area Sales Manager at Vena and previously worked as a Content Specialist. He continually strives to inspire finance professionals to become strategic business partners and is dedicated to helping them automate and streamline their planning processes so they can make better decisions with reliable, data-driven insights—enabling meaningful growth for organizations across the globe.

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