Are there too many business dashboards?
Posted By Dashboard Spy / 18th October 2011
What? Can it be true? Can one have too many business intelligence dashboards? Well, take a look at this article. Just as too many metrics and Key Performance Indicators can lead to analysis paralysis and failure to take action, one could have too many dashboards on too many systems to keep track of.
This article is from an ft.com post titled: Business Intelligence – Too many dashboards will bog you down.
Dane Group, a UK supplier of building facades and architectural metalwork, used frequently to incur unanticipated costs that cut into its profits.
It managed its contracts – which can take up to 18 months to complete – via a welter of spreadsheets that were not always kept updated.
“We would get to the end of a contract thinking we had made so much money on it and then discover £100,000 ($157,000) of costs we had not spotted before,” says Richard Bertram, finance director of the company, which has £25m of annual sales and 150 employees.
“We would order things on the phone and forget to place a purchase order. When the invoice came in, there was nothing to match it up with.”
To improve control of the manufacturing and billing process, Dane installed a business management system, supplied by a Swedish company – Industrial and Financial Systems.
This allows management to keep track of designs and materials and monitor costs and margins as a contract progresses.
“We used to make decisions based on perceptions rather than an analysis of the facts,” says Mr Bertram.
“Now we get better quality information in a more timely manner, which helps us with our decision-making.”
Awareness of true costs and margins gives the purchasing department more time to get better quotes from suppliers and simplifies calculating the amount of profit against sales.
Training on the new system started at the top of the company and went down.
Some staff readily adapted to the system, but additional training was provided for those who were warier.
Enterprise resource planning (ERP) systems of the sort installed at Dane have become vital to the management of businesses of all sizes over the past 30 years.
The increased uncertainty and volatility created by the credit crisis of 2007-2008 has made businesses even more dependent on up-to-date information on suppliers, customers and the internal workings of their own businesses.
Chief executives can no longer leave the management of their IT systems to their technology teams or their chief information officer. They must integrate it into their long-term strategy.
The use of smart phones and tablets at home and in the office has helped bridge the technology gap, but companies of all sizes often struggle to achieve full integration of IT into their strategic planning.
“We try to get chief executives to understand that if they can prioritise their key decisions and decide what information they need, they can get their technology organisation to create it,” says Stacy Blanchard, lead partner for organisation effectiveness for analytics at Accenture, a consultancy.
“If chief information officers do not see their role as being involved in the decision-making, then they are missing an opportunity. Lots of companies don’t have a creative partnership between the chief executive and the IT team.”
Even when senior management and the IT team are working effectively together, they can be swamped by the sheer amount of information that modern systems generate.
“Companies can be overwhelmed by data,” says Ms Blanchard. “They have to take a step back and sort out what information they need to achieve their strategy and to make decisions.”
Faced with this complexity, many companies have turned to “dashboards” to present the most vital data in an easily digestible format.
The onscreen dashboard will show top-level information in graphic form – like the dashboard of a car – and allows users to look at the underlying data as well.
In theory, dashboards are meant to overcome the conflicting versions of events that used to occur when companies depended heavily on spreadsheets, which were difficult to control and not always kept up to date.
But many companies now find they have too many dashboards and key performance indicators, so once again clarity is lost.
This profusion of information can mean senior management gets bogged down in analysing the past instead of using the data to think about the future.
Matt Peers, chief information officer at Deloitte, says: “People spend too much time poring over last week’s sales, rather than getting a model for next week’s.”
Technology can deliver the information, but leaders who have a clear idea of the data they require and the strategy they intend to pursue are vital for success.