Unpredictability is unavoidable in business, whether it’s part of an economic cycle or geopolitical event. But no matter the cause or degree, the visibility you have into real-time impacts on your business will affect whether your business thrives or simply weathers change. The best tool that businesses can engage in? The KPI dashboard.
What is KPI reporting?
KPI reporting is the act of tracking and analyzing your KPIs—key performance indicators—against your objectives over time. It helps you see how internal and external factors affect your business day to day, month to month and year to year.
In the long-term, KPI reporting drives growth, but it’s especially useful in times of disruption, when you need to stay nimble and proactively steer the business toward goals that drive revenue and profitability. With real-time visibility, you can identify impacts and adapt early on.
The KPI dashboard: your KPI command center
A KPI dashboard brings all of your most important metrics together in a dynamic, bird’s-eye view of performance over time, allowing you to see your progress and quickly run reports to improve decision-making.
With each report, you can sort, streamline and visualize data in different ways to illuminate the bigger picture or drill down to the details of a certain aspect of your business.
The KPIs you track will vary by business and industry, but when managing market unpredictability, you’ll especially need to know:
- Financial KPIs like actuals, burn rate and debt-to-equity ratio
- Sales KPIs like channels sales and cash generated per dollar
- Supply chain KPIs around quality and availability
Keep in mind: A KPI dashboard isn’t just a list of metrics. It’s a tool for decision makers more so than data scientists. You can curate dashboard data to tailor reports around specific issues, initiatives or audiences, such as the executive board or the customer team.
The value of KPI dashboards in times of disruption
KPI dashboards act as “scorecards” to track progress and course-correct, but that’s just a baseline. Their true potential lies in the insights they provide.
- Constant alignment – Dashboards promote regular assessment and collaboration, a crucial value-add during disruption. According to Harvard Business School, a business survey found that nearly one-third of managers said their company reacted too slowly to unforeseen problems and opportunities. Businesses should assess KPIs more frequently in times of crisis, as remote work can degrade communication and cohesiveness.
- Data-driven defense – Driving return on investment (ROI) and reducing inefficiency are business as usual, but dialing them up is a playbook move for navigating volatility. With a line of sight into the activities that sustain your balance sheet, you can cut costs with greater confidence.
- Early issue detection – Consider, for example, a warehouse bottleneck or a new sanction causing delays. Real-time reporting reveals impacts sooner, so you can solve problems faster.
- Opportunity creation – Disruptions often birth new behaviors and innovations. A robust KPI dashboard can uncover emerging trends and help you connect the dots to adapt to changes.
- Proactive communication – KPI dashboards are important communication tools, with insights to help you refine messaging. For businesses in the funding stage, they play a key role in sustaining investor confidence and forecasting risk during periods of change.
The long-term benefit of KPI visibility
The defining trait of resilient organizations is agility. Spotting change early and adapting quickly—or getting out in front of change altogether—is a key success driver in the digital age.
But without ongoing insight, not only do you open up your balance sheet to uncertainty, you lose the chance to pull ahead. Times of disruption are a furtive time to accelerate digital transformation and become more resilient. They also present an opportunity to double down on core competencies and use your business’s unique advantages to become more competitive.
Investing in transformation starts with data visibility and a robust KPI dashboard that shows you where you can innovate to root out inefficiency and reinvent for the future.
How to build a growth-driving business dashboard
1. Shore up your data practices
A business dashboard is only as good as the data that goes into it. The first step is assessing how well your company manages data.
“Many companies need to go back to their data sources to validate the accuracy of the information they are analyzing,” says fractional accountant Keri J.
2. Ask the right questions around KPIs
To develop your KPIs, start with questions that align to your objectives. Do you want to build leads or reduce debt? What’s the best measure of that? When creating your dashboard, be specific and realistic—think five or six KPIs total—and choose which KPIs to report based on the most relevant information you need now. If you’re building your agility, those KPIs may center on cash flow, revenue and profit margins along with acquisition and operating costs.
3. Customize to your needs
Other than ensuring your business dashboard is tracking over time, you’ll have several software providers and design choices to consider. For instance, in his book, “Rhythm: How to Achieve Breakthrough Execution and Accelerate Growth,” Patrick Thean suggests color coding KPIs to goals, with red indicating latency and green indicating that you’re on target.
4. Streamline visibility with different levels of reports
“You need your summary level report, and you need your detail level report. And they need to be connected,” says financial analyst Malisa N.
Make sure to attach the detailed report to your summary report, so that everyone can see the big picture, then drill into the details that are most relevant to them.
To create a business dashboard tailored to your goals, you’ll want the support of someone who’s been there so you can focus on the most meaningful KPIs and best practices.
A KPI dashboard helps you seize control, make proactive business decisions and build agility to succeed in any environment. Put your business in a better position to strategize for the future with data visualization services and KPI reporting. Paro’s elite community of remote finance experts provide strategic guidance and data analysis to help your business grow stronger.
