There is an overwhelming amount of data everywhere today, whether in wearables, such as watches, or IoT devices, such as thermostats. Corporations continue to acquire more actionable information from financial data, employee data, equipment data, etc.
The question is how does a company take all the data available and create visual business drivers? With unlimited data and distractions, the only hope to extrapolate and drive change is to narrow the scope. The key drivers must be measurable and visually compelling to drive change. There are four major steps in creating visually powerful business drivers.
1. Determine Key Drivers
Every business has differentiators that set it apart from competitors. These drivers may come from efficiency, customer value, quality or other areas. The first step in creating visual drivers for business is to define the company’s key drivers. For example, a mechanical contractor may track cost per unit produced. Another contractor may value units per hour installed or revenue per full-time operational employee. Each business will have different key drivers (KPIs). The selected KPIs need to be actionable. The variables that affect the KPIs and business need to be clear and defined.
2. Define Benchmarks
The next step involves taking the defined KPIs of the business and setting benchmarks metrics. There are several ways to define benchmarks.
- Contractors can look at their own historical data and future projections to set KPI targets.
- Contractors can look at industry publications that provide relevant benchmark data.
- Contractors can ask their accountants, insurance agents and bonding company for benchmark data.
- Contractors can join or form a peer group of like contractors in non-competing markets and benchmark based off of that group’s KPIs.
Creating benchmarks is not a set it and forget it process. Revise benchmarks annually, taking into account corporate and competitive market changes.
3. Develop Reporting
Once KPIs are defined and the benchmarks are set, it is time to create visually compelling information. There are many solutions that exist for dashboarding and reporting. There are also several implementation methods.
- Buy a rebuild solution that has some customization options in the package and link to the company’s data.
- Leverage reporting tools already imbedded in the company’s system.
- Develop a customer tool that meets the exact specifications of the business.
- Use internal company resources to develop and maintain the dashboard.
- Use a third party who specializes in dashboard and report development to create and maintain the KPI reporting tool.
Items to consider
- The dashboard tool should be flexible for the company. It should work well across all tools the business uses (e.g., smartphones, tablets, computers and large-format presentations) in common areas. The right solution will scale to fit the application.
- The next important key is ease of use. If a dashboard looks nice, but is hard to navigate and not in-depth enough, the solution will not be used.
- Taking time to think about the graphical representation for each KPI and how they link together is key. Some KPIs may be a lagging or leading indicator for another. Capturing the right information and showing trends will exponentially increase the solutions value.
- Another key item is data timeliness. Financial-level KPIs may update monthly, sales and operations data may update daily or in real time. The more recent the data the more valuable to decision-making.
- Set deliverable timelines, testing protocols and milestones for rolling out the KPI dashboard.
4. Drive Results
The final step is taking the dashboards and driving change. Educate users on the specific KPIs, the drivers behind each KPI and how their jobs influence the KPIs and business as a whole. Once employees understand the KPIs and the solutions, users will come to rely on the dashboard to drive decisions.
There is a lot of value to derive from KPIs that are well thought out, delivered in a timely manner and visually compelling. Companies that get this process right realize huge value in driving business value and change.