Dashboards and Balance Scorecards are built to give executives the ability to assess the company’s situation in an instant. Good and bad are shown using visual signposts based on so-called KPIs, without wasting time in compiling the data that precedes this decision.
This form of top level analysis reaches the highest point of the Business Intelligence pyramid. This is a form of analysis that will only be implemented at the highest bodies of a company. It should enable directors and managers to assess the situation of the business as quickly as possible, without having to conduct any preparatory research. They should be presented with a dashboard , as it were , that provides this information in a representative manner. The dashboard principle is a proactive way of using information that results in actions that are only taken when certain predetermined pointers request this. The information must be visible at a glance based on a visual representation. It is impossible for a manager to quickly assess the implications of a given situation from a list of data. This can only be achieved through the use of graphs and pointers. Figure 1 shows an example of the dashboard of the Business Objects analysis tool. The application is web-based, which becomes more essential as the corporate structure becomes segmented and delocalized.
Figure 1: dashboard” onclick=”openImage(this);”> Figure 1: dashboard
The dashboard technology is largely based on the use of so-called Key Performance Indicators (KPI). A KPI is a predetermined indicator that is monitored at the highest level. Its use leads to performance management , a form of management that is based on a global representation of the business and that should ultimately lead to better performance. A dashboard is therefore alert-based, resulting in visual signals that inform the manager of certain situations. These can be both positive and negative, depending on the action that should follow.
A good dashboard should in principle have some HOLAP functionality (see article Online Analytical Processing (OLAP)). In other words, it must be possible to quickly click through to the underlying detailed data from the dashboard. For example, a sales manager may at a given time receive a signal that the turnover figure has fallen below a predetermined scope. Most likely, this person will want to immediately investigate the origins of the problem and initially determine which region has the worst sales figures. A second step may require further drilling down to, for example, a specific store or seller. We can therefore say that a dashboard shows the top of the Business Intelligence pyramid, but that the rest of the pyramid should still hang below it in case a signal results in a possible downward action.
Just like the dashboard, a Balanced Scorecard will use KPIs, but from a much more global perspective. The system was developed in the early 1990s by financial experts and was mainly a response to the fact that traditional information environments were limited to the evaluation of financial parameters. From their point of view, the concept of business had to be viewed as much broader, which was reflected in some new points of view from which company performance was assessed. In addition to the obvious financial information and the usual evaluation of customer behavior, new perspectives were put forward that take into account the internal processes and the continuity of the company. When evaluating internal processes, one is mainly concerned with evaluating efficiency within the core. Time analyzes are made to better streamline internal procedures and positively influence the performance of each of the processes. External communication with suppliers and customers is also important, but not from the perspective of these parties, but to evaluate the company in relation to the outside world. Continuity is guaranteed by growth, which is why the innovative side of the company is examined here. Research into knowledge within the workforce should lead to training and efficient dissemination of any further knowledge acquisition throughout the business processes. Rewarding performance and retaining good employees are also important aspects within the entire structure.
Figuur 2: Balanced Scorecard” onclick=”openImage(this);”>Figuur 2: Balanced Scorecard
A Balanced Scorecard classifies all these perspectives under one heading, in the form of targeted information that is available in the blink of an eye to the highest bodies of the company. Efficient succession should lead to higher business profits, better results, learning capacity and motivated staff. It rests both in the financial aspect of the company and in the evaluation of social interests. Behavioral analysis and targeted rewarding of performance create a better working environment that results in higher labor quality and better financial results. A Balanced Scorecard therefore offers an overview of the most important aspects of the company across the various business units, grouped according to visual needs. Unexpected changes can be detected and analyzed, which should lead to greater knowledge of the business situation and enable the interpretation of future-oriented actions. It goes without saying that the representation of the internal processes and continuity in the form of a Balanced Scorecard is not obvious. While KPIs related to financial aspects could be distilled through the classic turnover or profit concepts, in these new situations they must be based on less tangible information, information that will depend even more on the practical composition of the company. Any form of information that allows an effective evaluation of all points of view can, in theory, be included within a Balanced Scorecard. Figure 2 summarizes the various approaches.