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Performance dashboards and scorecards: The new face of BI

Wayne Eckerson
In the last two years, business intelligence (BI) has finally reached critical mass. It's recognized by business leaders as a vital tool for helping organizations achieve strategic objectives, optimize performance and improve decisions and plans. As a result, executives are increasing BI budgets to provide employees with timely and relevant information.

A major reason BI has become so attractive is the emergence of performance

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dashboards and scorecards. These tools allow companies to digest large volumes of information and deliver information in an intuitive format, making it easy to identify and respond to critical, time-sensitive events, as well as explore issues and trends without getting hopelessly lost in reams of data or reports.

Earlier generations of query, reporting and analysis tools stymied widespread user adoption, and many BI tools have proven too complex for the average user. It turns out that most BI tools were designed for power users who spend most of their time sifting and crunching data, not casual users who use information as an auxiliary tool for doing their jobs. Thanks to performance dashboards and scorecards, these problems are dwindling.

Dashboards and scorecards provide a layered interface that conforms to the way users work rather than forcing them to conform to the way the tools work. Like peeling an onion, users move through successive layers of information in a carefully guided and systematic manner, uncovering critical information on an as-needed basis.

A study by The Data Warehousing Institute shows that 51% of organizations already use a performance dashboard or scorecard and another 17% are currently developing one. The study also shows that among organizations that already have a dashboard or scorecard, almost one-third use it as their primary application for reporting and analyzing data. (See chart.)

Does your organization use a dashboard or scorecard?

Yes: 51%
No: 32.5%
Under development: 16.5%
Base: 473 business intelligence professionals.
Source: Wayne Eckerson, "Strategies for Developing Analytic Applications" (TDWI Report Series, The Data Warehousing Institute, 2005.)

Dashboards and scorecards are visual display mechanisms within a performance management system. Many people use the terms interchangeably, but the primary difference is that dashboards are used to monitor the performance of operational processes while scorecards are used to chart the progress of tactical and strategic goals. (See chart -- "Comparing features.")

In the end, it doesn't matter whether you use the term dashboard or scorecard as long as the tool helps organizations get the information they need. Both dashboards and scorecards must display critical performance information on a single screen so users can monitor them at a glance and then drill down to view more information as needed. For this reason, I use the term performance dashboards to describe any application that uses a dashboard or scorecard interface.

Performance dashboards conform to the way users work, make it easy to digest critical information at a glance, and then explore and find the root causes of problems. As a result, performance dashboards resonate with users, especially executives and managers who have been searching for an intuitive way to measure, monitor and manage their organizations and groups.

Comparing features

Dashboard

Scorecard

Purpose

Measures performance

Charts progress

Users

Supervisors, specialists

Executives, managers, staff

Updates

"Right time" feeds

Periodic snapshots

Data

Events

Summaries

Display

Visual graphs, raw data

Visual graphs, text comments


Source: Wayne Eckerson, "Performance Dashboards: Measuring, Monitoring, and Managing Your Business" John Wiley & Sons, October 2005.)

Performance dashboards deliver the following three layers of information that let users navigate from summary-level views of critical data to detailed views in a structured manner:

Summary view: The top layer provides a customized view of a few critical metrics -- or key performance indicators -- tailored to each user's role in the organization and the processes they manage. This layer charts individual or group performance against targets and thresholds defined by managers in annual planning sessions or annual trends. Color-coding and symbols alert workers when performance is above or below targets and needs attention. In essence, this layer is where users monitor information. The dashboard, scorecard or portal interface essentially becomes a graphical exception report.

Multidimensional view: Often, the first step in responding to an alert is to gather additional information. To do this, a user simply clicks on the metric or chart to drill into the next layer in the dashboard or scorecard, which lets users explore issues and trends in a free-form manner. This layer provides multidimensional analysis tools that enable users to navigate through the data by dimensions (e.g., customer, geography and time) and hierarchies (e.g., country, region, city), usually in a prescribed manner defined upfront by IT administrators. More colloquially, these point-and-click tools let users "slice and dice," "drill down or up," or "pivot" the data to view exceptions and trends from any perspective they want.

Transactional view: The bottom layer lets users view transaction data, such as invoices, shipments or trades, which may be stored in a data warehouse or the operational system that captured it. Users often need such data to understand the root cause of a problem, such as missing or incomplete orders or a salesperson who has been sick. This layer either connects users to predefined operational reports or dynamically generates a SQL query to pull data out the operational system or data warehouse where it stored.

As the new face of BI, performance dashboards are transforming BI from a departmental activity spearheaded by power users to an enterprise resource leveraged by all workers. Performance dashboards are fulfilling the long-standing promise of BI to help organizations work smarter, optimize performance and achieve strategic objectives.

Wayne Eckerson is the director of research and services for The Data Warehousing Institute, a worldwide association of business intelligence and data warehousing professionals. He has covered data warehousing and business intelligence since 1995 and is the author of the book Performance Dashboards: Measuring, Monitoring, and Managing Your Business, which will be published by John Wiley & Sons in October 2005. He can be reached at weckerson@tdwi.org.


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