“Knowledge has become the key economic resource and the dominant – and perhaps only – source of comparative advantage” -Peter Drucker
Having relevant knowledge about your business and your industry is essential for making good decisions. Making uninformed decisions is the fastest way for owners to destroy a business. 50 years ago, the challenge was identifying sources and creating methods to capture data that could be analyzed and used to create business knowledge.
Today, we have the opposite problem. Our technology has become so good at capturing data and storing it cheaply that we are bombarded with almost unlimited amounts of information. When faced with a fire hose of data, many business owners become paralyzed, trying fruitlessly to process everything. Others decide to just ignore it and use their gut to make decisions. But what if there were a way to turn that fire hose into a controlled and precise stream? Enter management dashboards.
What are management dashboards?
Management dashboards are user-friendly presentations of relevant data that has been collected and processed. They provide business owners with a quick and simple way to “see” only the most relevant information about your business.
Just like your car’s dashboard they only show you information that you need to know and that you can act upon. Information is usually presented in a graphical interface as opposed to numbers and texts to allow for quick processing, identification of trends and instant alerts when something goes wrong. If something catches your eye, an effective dashboard will allow you to drill down to obtain more granular data for further analysis.
What to include in your management dashboard
The information that should be included will vary depending on your particular business. Start by asking yourself “what are the five key questions I need answered every day about my business?” Some good questions would be:
- How many pre-qualified sales leads have we generated in the past 24 hours in each of our five sales regions? Is this trending up or down?
- How many units have we sold in the past week and how does this compare with previous weeks?
- What is the dollar amount of sales we have generated in the past week?
- What percentage of our customers (and how many of them) are more than 30/60/90 days late on their payments?
- How many days’ worth of operating expenses do we have in cash and how does this compare with our benchmark?
These are the kinds of questions an effective management dashboard will answer. While having your first cup of coffee in the morning, you can identify areas of concern and deal with them before they become a serious problem.
How to design and setup a management dashboard that works
There are multiple management dashboard solutions available. Most solutions can plug into your existing management information system and automatically prepare dashboards that are available on your desktop as stand-alone programs are within your web browser. If you have an in-house IT team, they can build one fully customized to your needs. Major vendors like IBM and Oracle provide solutions for larger enterprises. But there are also a number of smaller companies like CrowdSource and FusionCharts that work if you are on a smaller budget.
Mike Periu is the founder of EcoFin Media, LLC an independent producer of financial, economic and entrepreneurial content for television, radio, print and the internet. Over the past ten years he has started three companies and advised over 50 companies on financial strategies including fundraising. Mike also hosts regular small business webinars on a range of topics relevant to business owners.