Every business owner and manager will benefit from implementing processes that provide information on business performance that can be easily evaluated to identify areas of improvement, risks and trends. One method of providing such information is dashboard reporting.
Like a car dashboard, the objective of dashboard reporting is to provide clear and concise information of the key drivers of business performance. Dashboard reporting should be a synopsis of business operations and provide information in a visual format that is easy to read, remembered and understood by key decision makers in the business. This should in turn improve decision making.
Why use dashboard reports?
For the continual improvement of business performance, all business owners and managers should step back from the day to day activities of their business and review the bigger picture of business operations on a regular basis. To assist with this, business owners and managers should receive regular management reporting.
The objective of management reporting is to provide useful information on a regular basis that highlight key issues, risks and trends in the business. Key decision makers should use such information to assist their decision making.
Dashboard reports provide an overview of consolidated business information, usually in a visual format and focussed on key metrics and risks.
The information in a dashboard report should facilitate discussion or focus where deviations from benchmark are noted and encourage management by exception. The report provides triggers for further action if required.
Limitations of dashboard reporting
It is important that business owners, managers and other users of the dashboard reports understand that the information will only be effective where;
- The data is up to date
- Reports are reviewed regularly
- Information provided in useful
Steps to develop a dashboard report
- Determine key areas of business performance and underperformance
- Include key measures implemented to improve business performance
- Identify key strategic goals from the Business Plan
- Incorporate key risks into the report
- Incorporate opportunities into the report
- Consider the audience (i.e. who will be using the report)
- Speak to the audience and ask them about their key information needs
- Speak to employees to identify required information
- Filter information from the above steps to identify key drivers and risks
When deciding the frequency of reporting it is essential to asses the resources available to generate and action results from the report.
Generally, all businesses should generate monthly reports however for some businesses weekly dashboard reports are more appropriate. For example, a business with high weekly sales.
The use of dashboard reporting will assist business owners in improving their decision-making process and hence business performance. When used in conjunction with business evaluation, the key metrics can be set to monitor all important business drivers and risks. This should encourage regular review and action where required.
The dashboard should align wit the business strategy and be easy to create, understand and explain. The dashboard report also needs to be flexible enough to allow new more relevant metrics to support the continual improvement of the business.
Implementing dashboard reporting into the business will ensure that the important metrics for business success are continually monitored and actioned upon.