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Published on 9/18/2014 additional information available

KPI Dashboards Help Managers Make More Effective Decisions by Luke Samuel

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Interpreting the monthly report can be one of the most daunting tasks a manager has to undertake. Every month reams of data, rows and columns, charts and graphs appear providing what purports to be the monthly status. The problem is, most of the time all of the effort that has gone into producing the report has been undertaken by someone else.

Often, the responsibility is given to someone in the finance department who has a highly focused view of the business world. They are interested in the company numbers, everything from sales through revenue to operating costs and profit. These are of course very important, but they do not tell the whole story. Just taking this information and presenting it to management will not enable the executive team to make the right decisions to take the business forward.

The problem, however, rarely lies with the finance operative who has been given the task of producing the report. That person is simply trying to make sense of the requirement based on his or her view of the world. No, the problem actually lies with the management team that are asking for the information in the first place. They, more often than not, have asked for a report based on the things that the company measures and not on what the company is trying to achieve.

The monthly report should be based on company goals and objectives. That is, the things that the company wants to achieve, not what they have achieved (the measures). So the first step is to set the goals and objectives. It is here where a KPI Dashboard (Key Performance Indicator Dashboard) can be very helpful.

KPI software today has become very sophisticated and often provides automated guides that take the user through the process of setting up the system. Using the benefit of years and years of culminated knowledge on the subject of business performance management, the system can take the user through a step-by-step approach often starting with company Vision, Mission.

The KPI Dashboard is a key component that forces the users to think about how they want to display information in a way that is Clear and meaningful and Provides a mechanism to drill-down to further detail if and when required. It is not unusual for organisations to start with a Strategy Map. A strategy map can be created using one of several methodologies but the defect standard tends to be the Balanced Scorecard.

The Balanced Scorecard starts with the premise that as well as financial objectives and measures a company management team needs to think about objectives and measures from three other areas that they call Perspectives. So as well as the Financial Perspective there are Customer, Internal Processes and Capacity/Leaning and Growth Perspectives as well. By forcing management to think about these other areas provided the 'Balance' in the balanced scorecard.

So typically, you might see Objectives like 'Increase Customer Satisfaction' in the Customer Perspective or 'Improve Accounting Process' in the Internal Processes Perspective or 'Improve Safety Training' in the Capacity/learning and Growth Perspective. By forcing management to think about objectives other than financial, a more holistic picture of the business can be built. This is turn can be described in a KPI dashboard together with the associated measures.

The key here is to force management into a new way of thinking. To move them away from a simplistic approach that relies on the interpretation of financial data presented in spreadsheets towards a more holistic business view. KPI Dashboards force this behaviour. By structuring the activities through a pre-dined process that is built into the software, the management team get the advantage of decades of intelligence around the whole subject of business performance management.

Working as a consultant in the area of strategic planning and the use of the balanced scorecard. Software automation is central to good strategic planning and should be a core business tool in today's highly competitive environment. Check out Intrafocus Limited at http://www.intrafocus.com. They specialise in strategic planning software, balanced scorecard software and KPI software. They also provide professional certification classes for the Balanced Scorecard methodology.

Article Source: http://EzineArticles.com/?expert=Luke_Samuel


Article Source: http://EzineArticles.com/8714474


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