A Quick Guide for Building KPI Dashboards: Part 1
[Friday, March 8, 2013] by Rhys Morgan
Building a KPI Dashboard can be tricky, even if you have collected a lot of KPI data. In order for these dashboards to be effective, managers have to consider many different things, from choosing the right KPIs to the layout of each chart. This can be overwhelming.
With that in mind, I have written this guide to show you how to create meaningful, effective KPI Dashboards from scratch. To do this, I will break this down into 8 easy steps, with the first three in this article and the others to follow.
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1. Select the right KPIs
To start building a KPI dashboard, you must first consider the KPIs you wish to measure. Though the process for choosing your KPIs has been documented in articles longer than this entire guide, here are two simple things you should remember when choosing your KPIs.
i. Your KPIs should always tell you something about the progress of your company
A mistake that many people make is that they assume KPIs are simply any measurable metric. However, while KPIs are indeed metrics, they are the metrics which can tell you how your company is fairing in a certain area of business. If you’re evaluating your KPIs and don’t know where to start, just ask yourself: Can this KPI tell me if my company is doing good, ok, or bad?
ii. KPIs should always be actionable
Even if you’ve established that your KPI can gauge company progress, it doesn’t really have much use if you can’t do anything about it. A good example of this is measuring something like total sales every month.
While this may seem as if it’s indicative of business performance, take another look at the chart above. This metric will almost always increase (unless many customers leave a business) and therefore won’t tell you that action is required until it is too late. A metric such as new sales every month tells managers if action needs to be taken much earlier, and therefore is more indicative of business progress.
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iii. Your KPIs must have dates associated with them (mostly)
KPI dashboards are designed to show the progress of your business, and allow you to spot trends in your data. By definition, this means that your data has to have the ability to be compared to previous values, and therefore occur at regular intervals (days, weeks, months, years). After all, how can you take action if you don’t know when your KPI values occurred?
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2. Arrange your data table in the Correct Format
In my experience working with companies around the world, one of the first hurdles that businesses come across when creating dashboards is that their data isn’t in the format required by their dashboard software (unless they’re using Excel, which is useful).
While this is very subjective, I urge you to find out as soon as possible what the requirements are for your chosen software; trust me, it’ll save you much heartache. While many different dashboard services may require different table formats, let me detail the correct format for our software, Target Dashboard, which has a very intuitive, logical format that really only requires two steps to modify.
i. Your table must have a Date Column
To recap a point made in from the previous section, building a KPI dashboard is usually most effective for spotting trends in data measured at regular intervals. With this in mind, Target Dashboard is designed to hold time-based data, and therefore requires you to arrange your data with the dates in a column, as below.
Some might initially choose to place their dates as table headings. For Target Dashboard specifically, this is not compatible. Therefore, by arranging your data according to date beforehand, you can import your data far more easily.
ii. Decide whether you wish to have category columns
Depending on the KPIs you are measuring, you may wish to further group your data according to category (such as product, or perhaps region).
The main advantage to this is that you can pivot your data later, which will allow you to compare two categories on the same chart.
Other than these two points, you’re pretty much good to go. Other dashboard applications will have their own preferred layouts, so make sure you learn about them before importing your data into them!
3. Decide on the Layout of your Dashboard
So, you’ve got the right data in the right configuration. Congrats! Now, the real fun begins. Creating a dashboard can seem like a daunting process, with so many questions that need answering. The best way to start anything is from the beginning, and for dashboards, that involves deciding on the layout which your dashboard will take.
The layout of your dashboard is important, as it can affect the way your data is visualised to others. The first thing to learn about the layout of your dashboard is that it is likely to change as you go through the subsequent steps in this guide. Your Dashboard layout is an ongoing process which requires careful consideration. Don’t be afraid to experiment the layout, and remember these rules of thumb.
i. Consider your Users
Who is going to use your dashboard? Is it your manager, or perhaps you are designing a dashboard for your stakeholders. Taking the end user into consideration (if it isn’t yourself) can mean the difference between them understanding your message, or missing the point.
If you are using a dashboard application which allows a grid-style layout, the size of grid will depend on the number of KPIs you wish to show, as well as if you wish to present your dashboard externally (warranting larger charts). For example, if you were creating a dashboard for internal use, you might fit a lot more information onto it, then if it were used for a presentation, which would be better displayed so that the dashboard doesn’t have to be scrolled to view all the info.
ii. Design your layout around your chart choices
Usually, the charts which you wish to show on your dashboard will influence your layout the most. Why? Because emphasising your most important information is usually the goal of any dashboard builder. However, since some information will tend to take precedence over others, it needs to be emphasised in a way which prevents the rest from being ignored.
Here is a dashboard with an assortment of charts.
While this shows all the information required, it doesn’t draw the user’s eye to anything in particular.
Here’s the same dashboard rearranged.
Now, the categorical Pie-chart is centred, which acts as a point of reference for the other charts in this dashboard. Remember, you may have the most beautiful, meaningful charts in your dashboard, but laying them out the wrong way can take away some of their impact.
Next time: Filling your dashboard with information
This first article has shown you the initial steps in creating a useful, professional-level dashboard from your own KPIs, which will allow you to visualise your data and spot trends. In the follow-up article to this one, I will take you through the different ways of filling your dashboard with useful information, as well as how to make it even easier for users to understand.
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