What's an Executive Dashboard and is it for You?By: David CrainExecutive Dashboards are quickly becoming one of the hottest industry trends. But what are they really and should your company implement them?Overview Executive Dashboards have started appearing in trade magazines as one of the latest hot topics. While Executive Dashboards can offer great value to an organization, the hype vs. reality quotient is rapidly approaching the days of Knowledge Management. In this article, we will present an overview of some of the business reasons driving the need for dashboards, outline issues to consider, and present a high-level approach to implementing an Executive Dashboard within your company. What then is an Executive Dashboard? An Executive Dashboard is a business process information system. It visually displays information pertaining to segments of a business. What distinguishes a dashboard from a business intelligence system is display of information within the context of a metric or benchmark. Therefore, information displayed can be color-coded to indicate if it is below, above or at expectations. Typically, dashboards also offer “drill-down” capabilities. If a particular metric is performing below expectations, clicking the visual representation will display the next level of detail supporting the metric. For instance, if Monthly Sales are indicated as red, clicking the indicator might bring up sales figures by district. One could then identify then under-performing districts. Dashboards may offer several levels of detail. Dashboards also typically offer information that is relevant in the timeframe it is used. Not all information needs to be updated real-time. Monthly Sales might not need to be updated real-time, but production defects might. Executive Dashboards also typically are constructed to display information pertaining to Key Performance Indicators (KPI), or other scorecard-linked metrics. In this manner, dashboards add value by focusing the user on monitoring information pertaining to those indicators and metrics deemed most critical to the business. Executive Decision-MakingA recent white paper by CXO Systems outlined some interesting aspects to executive decision-making, and the challenges in being effective. While the white paper was focused on CIO’s, it’s core messages are applicable to all executives. The article focused on the information executives use to make decisions and manage their operations, and how often they access that information. The study found that executives rely heavily on information from many sources to make their decisions; at least one day out of every week is

spent gathering information. Strategic, rather than tactical information has more relevance for the executive. Information sources tend to be reports and E-Mails rather than integrated systems or direct access to the data itself. However, there are significant barriers to effectiveness in executive information gathering. With a focus on strategic data, and no direct access to the details, executives tend to rely on summarized information prepared by their staff. This information is filtered by perceptions possibly not shared by the executive, hides unique information that may be important, and the potential for information perceived as “bad news” to be hidden or delayed. Additionally, the study found that some of the least important pieces of information were being measured most frequently, and some of the most important information less frequently. This was due both to the time-sensitive nature of some of the information along with the perceived cost and effort in getting more frequent updates of some information. The most frequently stated barrier to getting the information needed, at the level needed, at the frequency needed, was cost. With several contributing technologies becoming more prevalent, and implementation costs of those technologies decreasing, many companies are beginning to look at Executive Dashboards as an important decision-making tool for the modern executive. Executive Dashboards – The GoodExecutive Dashboards, once a toy for the Fortune 100’s, are coming more and more to the mainstream. New technologies such as web services have radically lowered the cost of building real-time systems that span multiple information systems. These technologies are making dashboards look more and more realistic for small and medium-sized companies also. Why are Executive Dashboards so intriguing? They offer several benefits over the normal information management channels:• Ability to quickly review KPI’s relative to goal• Help identify problem areas more quickly• Enable faster and more accurate corrective action decisions• Keep you focused on key business success items• Simplified, consolidate reporting in a visual format, linked to supporting data when needed• Enables a scorecard approach to business management• Can provide real-time monitoringExecutive Dashboards are also applicable across the organization, and offers a chance to align the right information with the person who can take action on it. Alerts can be implemented to notify appropriate resources when a particular metric is out of line or threshold is reached.

Dashboard metrics can be aligned with goals, and should be to make the dashboard valuable. Not only will this highlight when a goal is out of line, but may also make you re-think your goals. One telecom firm set a metric around keeping customer churn low, only to find out that 75% to 80% of the customers they were trying to keep were unprofitable. Integrating dashboards directly into the process workflow may result in process improvements. A best practice around this approach is to directly tie compensation for the process owner to the quality of the process itself. Dashboards can also help detect “business pain”, and help identify future pain. By linking dashboard metrics with contextual analysis, the dashboard may even be able to suggest corrective actions or launch on online meeting. Executive Dashboards – The Bad and The UglyWhile Executive Dashboards are coming into their own as a information management approach, carefully filter the hype. There still is a lot of work to do before they become mainstream, and the tools, services, and products are still fragmented. The real cautionary tale is the extraordinary effort behind the scenes that must take place on your part before even thinking or starting an Executive Dashboard. Following are a few issues to think about: 1. What shape are your current systems and data in? Aggregated information based on bad data is no help to your organization. Likewise, if your systems are poorly architected, out-of-date, or non-integrated, then you potentially face significant upfront technical issues to enable a dashboard approach.2. Does your organization have clear goals and metrics? A mission statement and a vision do not qualify as metrics. For a dashboard to succeed, clearly defined business process goals and metrics need to be established. To contribute to business improvement, the goals need to be tied to a strategy. There are many scorecard approaches to business process improvement that could be used. Will you use your own goals for context or industry/competitor benchmarks?3. Is your dashboard approach realistic? Many of today’s Executive Dashboards are a waste of money. They can’t positively impact the business and fizzle out. Reasons include too lofty a focus, they operate passively, or are disconnected from the employees involved in the process. Additionally, have you considered the political and cultural issues within your company that relate to a dashboard’s success?4. Do you have budget? This is a new area for most business, and small and medium-sized businesses should not expect to be able to implement an Executive Dashboard without outside assistance. 5. The dashboard is just the beginning. Perhaps the most important aspect of any dashboard is it’s “drill down” capability allowing a user to zero in on successively more detailed information views in order to do root cause analysis on

underperforming metrics. Do not underestimate the complexity in constructing these detailed views. One ApproachExecutive Dashboards, while different than pure information portals, can benefit from many of the lessons learned in implementing portals. Dashboards should evolve as a series of successes, rather than one implementation project with a beginning and an end. As successes increase and value continues to be demonstrated by the dashboard, organization interest and executive support should follow. Only then should the dashboard concept begin to expand within the organization. To get started then, companies should follow an iterative approach, and strive to complete each iteration quickly, possibly within a quarter. While there is no single approach to such a program, the following is one high-level roadmap to think about how to implement an Executive Dashboard. 1. Create a “view-only” prototype. The dashboard project should start out as a prototype, with very few metrics. The project team should be small and include individuals who can validate the information presented. Activities in this phase include:a. Selecting the metrics that will be displayed. Engage an executive sponsor and make sure to work with metrics that can have an impact on the business.b. Verify assumptions and definitions with action-takers. c. Validate data sources, benchmarks, and quality of data. Can the data be updated within the cycle of decision making? Is there a standard or benchmark of good performance? 2. Make the prototype actionable. Begin work on this step even as the view-only prototype is being worked on.a. Add thresholds and action-takers. Make sure there are escalation or alternate notification strategies.b. Match data refresh rates to the cycle of decision-making.c. Embed review and feedback mechanisms. The best way to keep a dashboard active and increase it’s usefulness is through active review of the metrics and process improvements. 3. Review results and refine the dashboard. Once the dashboard is implemented, start making it even more useful and more widely deployed. Now is the time to start raising awareness more broadly within the organization.a. Revisit thresholds – too easy? Implementation of this phase of the dashboard is in it’s final stages, so make sure the thresholds aren’t too easy. Constant “green” (metric meeting target) on all metrics doesn’t do any good and won’t contribute to continual improvement.

b. Add contextual analysis. Look for opportunities to link metrics to one another either for added explanation or for exposing more subtle relationships in your company.c. Create or reinforce your company’s problem-solving mechanisms. A dashboard can only display information as it relates to a KPI or metric. It can’t interpret the results, nor can it solve problems that come to the surface. Make sure the dashboard is being monitored for issues, and reinforce the ways your company employees solve problems. Final ThoughtsExecutive Dashboards and dashboards in general can add significant value to your organization by providing critical decision-making information in a timely fashion and a window to your business process performance. However, even with the decreasing costs of the technologies used to build these applications, they remain a complex initiative not to be undertaken lightly. While the allure of an Executive Dashboard is attractive, most companies would be better off focusing on a small proof of concept approach. Lessons learned out of the proof of concept will help determine the viability of the dashboard approach on a larger scale. Also, the “sandbox” environment of a proof of concept will allow your IT department to evaluate software approaches and identify internal technical hurdles that must be overcome before an enterprise deployment. Make sure your dashboard it tied to metrics and goals. It is this linkage of the business information in the context of a benchmark or goal that distinguishes dashboards from Business Intelligence systems. Don’t be scared by the issues presented in this article. The small and medium-sized company can successfully implement dashboards. Start small, keep it simple, and don’t be afraid to ask for help. Dave Crain is CAMP, Inc.’s Director of Business and Information Systems. In this role, Dave is responsible for setting strategic goals and aligning CAMP’s business and technology programs toward them. Central to this strategy is a shift toward a knowledge-based organization. Before joining CAMP, Dave spent 12 years at Cap Gemini America (now Sogeti), in consulting, business development, and sales positions. While at Cap Gemini, Dave was a member of several international work team that developed Knowledge Management, Electronic Commerce, and Data Warehousing service offerings.