What is a KPI dashboard?
Key Performance Indicators (KPIs) are quantifiable metrics used to measure progression toward primary business objectives and goals. Leaders are responsible for achieving specific results with their teams and they rely on specific KPIs to track and understand where their teams are in achieving results.
KPI dashboards provide at-a-glance insight into where your business is under- or over-performing. By presenting this information in a simple, easy-to-understand format, these dashboards help business leaders quickly spot trends and make well-informed business decisions.
KPI dashboards are not designed to include excessive details. Instead, they provide top-level insight into business performance and serve as a jumping-off point for business leaders to request more detailed analyses.
Benefits of a KPI dashboard
Successful organizations rely on KPI dashboards for the insights necessary to make decisions that effectively move the business forward. That’s because these dashboards bring important operational data into one place, making it more efficient to set goals, allocate resources, improve workflow and optimize return on investment.
Without unified dashboards, businesses may waste time and money wading through disparate data sources because of how long it takes to analyze and organize siloed data each time employees need answers to simple questions about business performance.
KPI dashboards can help you:
Accurately measure and evaluate business performance
KPI dashboards provide a concise and consolidated view into overall business performance by measuring only the most essential success metrics. By setting and tracking goals in these dashboards, leaders can effectively evaluate business performance.
Analyze return on investments (ROI)
By understanding ROI, you can make better decisions about whether to make an investment, if the investment has been worthwhile and, if so, by how much. A KPI dashboard can give you real-time insight into the financial outcomes of decisions.
Find issues or inefficiencies at scale
A KPI dashboard provides easy access to performance metrics about issues or inefficiencies that prevent goal attainment that can inform appropriate and faster remediation.
Strategically identify opportunities for optimization
Just as KPIs can identify issues or inefficiencies, they can also help discover trends and opportunities for business growth. A dashboard allows you to spot patterns and glean insights that can be used to define new goals and opportunities for optimization.
Make data-backed decisions
True performance improvement happens only when decisions are made using data — not gut instincts. KPI dashboards aggregate important data from across your organization in one place, allowing you to extract what you need to make informed business decisions.
Choosing KPIs for your dashboard
The most effective KPIs are directly related to specific outcomes relevant to your business goals. To choose the best metrics for your dashboard, consider these five models:
Consult stakeholders and business leaders
It’s imperative to get buy-in from decision makers about which KPIs should be included in your dashboard to help various stakeholders align on what should be measured, making the dashboard useful. It also helps establish a protocol for regular review of KPIs, as these can change over time, requiring revision or selection of new priorities.
Be specific when defining KPIs
Choose metrics that are specific and the most critical measures of meeting your business goals. A narrow focus allows your team to focus on the highest priority goals. Choosing specific KPIs also means there is no room for creative interpretation.
Choose KPIs that are actionable
Keep in mind the outcome you want to achieve and how you can influence that outcome. Learn about the must-have KPIs you should include for a marketing dashboard.
Set KPIs aligned with your business goals and objectives
To be useful in executing a strategy, KPIs must be aligned with the strategy from the start. By doing so, your KPIs will relate to each other and deliver the needed insight to fulfill your vision and meet business goals and objectives.
Ensure that your KPIs are achievable and realistic
To deliver insights that move your organization forward, KPI metrics must be rigorous, yet realistic. When the chosen metrics are actionable and aligned with business goals, you’ll choose achievable KPIs that your leaders can embrace.