Actionable Data is Business Intelligence
There is more economic volatility in our world today than ever before. A CEO and their management team cannot wait for financial statements to be produced on the 20th of the following month for decisions that need to be made in the moment. Rather, they need to invest in fast-acting tools to drive improved performance using real-time information.
When I founded Turning Point Consulting, it was difficult to extract actionable data from the accounting and ERP systems used by middle market companies to help them better understand their successes and the areas that needed work. There were few tools available to smaller companies that facilitated good data visualization in a timely fashion. Still, our firm required almost all of our clients to adopt weekly dashboards, or scorecards, by exporting data into Excel and creating data cubes that we used to make primitive graphs. But they worked.
Though the technology has changed for the better, dashboards that focus on the 10 or 12 key metrics are still one of the most powerful tools an executive can have to foster real-time accountability and decision-making. Today, almost every accounting or ERP system will have a portal populating up-to-date feeds of data into a commanding visualization tool. There are more than 20 powerful programs that will work—some of my top picks are Power BI and Tableau—and most today are mobile device-enabled. Here are my tips for how to make them work best for your company:
GET TO THE ROOT OF IT—Determining root cause is key. This is where businesses will find actionable information. Look for variables that can change and aren’t dependent on other aspects of the operation, then immediately address them.
SEE NEGATIVES AS A POSITIVE—A dashboard can point out positive affirmations and negative consequences. Both can be good in the long run. By breaking down this information, and determining root cause, a company can identify and address issues in real-time before profits take a hit.
SHARE THE NEWS AND RESPONSIBILITY—I am a firm believer that every company should invest in dashboards or scorecards that are distributed weekly, or, in some cases, daily. Those tools should be the focus of 15-minute meetings that focus solely on exceptions. It’s equally as important, then, to communicate accountability to individuals within the company to meet expectations, especially those they directly influence.
KEEP IT SIMPLE—With so many tools at our disposal today, information overload can become a real problem. Limit the number of performance indicators the dashboard is tracking to keep it relevant. I recommend tracking sales, gross profit, sales by customer, and on-time delivery. This will keep data from becoming diluted, difficult to understand, and, ultimately, overwhelming.
EMBRACE CHANGE—Dashboards or scorecards can only do so much. After the data is processed, shared, and understood, it’s up to executives to make use of their investment and create the change needed to optimize results.
