April 15, 2015
Avoid 6 Major KPI Tracking Pitfalls with Custom Business Dashboards
Custom business dashboards and thoughtful KPI tracking can do wonders for an organization, giving executives the data they need to make smart decisions, implement powerful strategies and grow their business in the long run. Unfortunately, when setting up their dashboards, many executives and companies fall victim to common pitfalls, and jeopardize not only the quality of information they can gather, but also the accuracy of the decisions they make based on that data. In the end, this can be a detriment to an organization’s success, hindering the decision-making process and slowing overall progress.
If you’re tracking KPIs with a dashboard at your organization, make sure you’re doing it right. Take care to avoid these common mistakes, and ensure you’re as primed for success as possible:
1. Inaccurate Data
Inaccurate data can render even the best dashboard useless. Unfortunately, it’s all too common. Since data is acquired from so many different sources – various department heads, multiple documents and spreadsheets, and even outside organizations like Salesforce or InsideSales – it’s often gathered in inconsistent, unclear ways. It gets massaged, it gets altered and by the time it gets to the dashboard, it may not be representative of your company at all. If you base your decisions on this bad data, you’ll most likely end up making the wrong choices. Before setting up custom business dashboards at your organization, always be sure to verify your data sources first. Find out where they’re getting their numbers, how they’re tracking them and how they’re delivering it to you. Without strong, reliable and accurate data sources, your dashboard is valueless.
2. Outdated or Incomplete Data
Outdated or incomplete data is just as bad as inaccurate data when you’re making evaluations with the future in mind. Basing decisions on old information or on a partial snapshot of company performance isn’t going to get you anywhere. If data is missing, you’re not seeing the entire picture and you don’t have all the information you need to make a sound decision.
3. Failing to Set Goals
Setting goals and tracking achievements is ultimately how success is measured. Without goals, a dashboard is ineffective. It’s not driving your organization toward anything, and it’s not helping you get any further than you are right now. For a dashboard to truly do its job, you need to set measurable, quantifiable goals for your organization. It could be serving X amount of clients, bringing in Y amount of sales, or achieving 95% client satisfaction. Setting these goals will allow you to select the correct KPIs and implement an effective dashboard that drives all parts of your organization toward the same end. It will also help to put all members of your company on the same page. From entry-level assistants to C-level executives, you’ll all be working toward the same definition of success.
4. Too Much Data
While inaccurate, outdated and incomplete data can be a problem, too much data can also be a hindrance to the decision-making process. Extraneous information can make it difficult to discern what’s really important from an organization’s data. It can muddle the big picture, distract and overwhelm users, make trends harder to spot and make metrics less actionable. Additionally, it can make the data gathering and consumption process much more time- and resource-consuming – neither of which is good for your bottom line. Effective custom business dashboards should show only the metrics that help measure the organization’s important goals and milestones—your key performance indicators (KPIs)—and they should eliminate superfluous data.
5. Choosing the Wrong KPIs
KPIs are the heart of custom business dashboards. They determine what data you get, what decisions you can make and how your company will fare in the long run. If you select the wrong ones, you’re not going to get all the information you need to make wise decisions that move your business forward. For a truly effective dashboard, you need to choose KPIs that directly correlate to the success of your business as a whole.
6. Failing to Look Forward
While it’s true that business dashboards do contain historical data and measurements of what’s already happened, its purpose isn’t to act as a veritable yearbook for your organization’s performance. Rather, it’s to fuel decisions that move your business forward and inspire real, profitable change. Unfortunately, too many executives and organizations fail to focus on this fact. They spend too much time reporting what already happened, and not enough time analyzing what it means. Instead of investing time in after-the-fact reporting and documentation, execs should use their custom business dashboards to spot trends, extrapolate insights, and note recurring events that may point to the organization’s future. Then, this data can be used to spur important conversations, changes and strategies to react to those expected events and drive the company toward success.
Custom Business Dashboards Can Help
When set up correctly, custom business dashboards can give executives the information they need to affect real, tangible, profitable change within their organization. Falling into one of these traps, however, can render a dashboard virtually useless and affect the quality of data and decisions that can come from it.
Do you want to ensure your KPI tracking is doing its job? Contact Xeo, or try out our free custom business dashboard today.