From Spreadsheet Insanity to Dashboard-driven Decisions: How to Make the Move

Performance management dashboards are a hot topic at SAP BusinessObjects events and many of our business management user group meetings. That’s because dashboards have evolved into something much more powerful than what we knew just five years ago.

They are no longer simply a collection of static images spit out by spreadsheets and tools. Today’s business dashboards are powered by dynamic business management software and business intelligence (BI) platforms. The difference can be seen immediately and all the way down to your bottom line.

Just stride into an executive meeting in a company that’s made the leap from spreadsheets to dashboards. More information is covered in less time. Tough problems are easier to solve. There are fewer folks saying, “Let me get back to you on that.” Compared with spreadsheets, dashboards can help provide:

• A more intuitive visualization to drive faster identification of trends and variances
• Live connectivity back to the data stored in multiple sources
• Data lineage showing where data came from and what transformations have been applied
• Thresholds and alerts when things go wrong (such as missed sales targets and forecasts, expense overages)
• Guided navigation from top- level KPIs to the underlying causes of trends and variances

If you have an SAP business management software solution, you might already have basic to intermediate dashboarding capabilities now (in SAP Business One & SAP All-in-One).

You might also have the capability to scale up to more comprehensive business intelligence capabilities from SAP BusinessObjects. So, whether your business is just getting started with dashboards or is using them to some degree, SAP can help you take the next step.

Planning Your Dashboard Ramp-Up

The typical evolution of dashboard use in the enterprise starts with key performance indicators (KPIs) for the executive suite, and then progresses to department-level initiatives.

The object is to measure the keys to your business success, and provide a feedback mechanism that lets you make changes to your operation, based on the data conveyance. In other words, ask the question: If you look at the dashboard, can you immediately see something out of line and know where to go to do something about it?

We’ve assembled a summary of the most popular dashboard initiatives happening today, with examples of the types of analytics you can use to take your business or departmental operations to the next level.

Cash Flow and Profitability

There are many ways to measure cash flow and in each business the important measures will be different. Here are some common metrics that may be used:

• Operating cash flow
• Days cash on hand
• Days sales outstanding
• Cash conversion cycle
• Gross profit margin
• Operating profit margin
• Net income percentage
• Return on assets
• Debt ratios

  Sample dashboard from SAP Business One. A key difference between a spreadsheet report and SAP Business One dashboards is live connectivity to source data, which ensures the most up-to-date information. With spreadsheets, teams are constantly adding data and rolling it up in a new version which can take considerable time and create unnecessary errors.

Operational Efficiency

Not long ago, operational efficiency metrics were used only by manufacturing-related industries. Modern dashboards are rapidly changing this reality, as nearly any business can benefit from business efficiency metrics when data is readily available. The specific measures that you choose will be dependent on your individual business, but here are some potential measurement ideas:

• Manufacturing or service efficiency
• Raw material usage
• Scrap rates
• Labor hours and staff capacity
• Utility usage
• Transportation costs
• Inventory status and turns

This custom dashboard was created by SAP solution partner iNetSoft. It provides an executive overview of the KPIs in a highly visual format that helps executives understand where the problem areas are in short order.

Sales and Marketing

Gaining visibility into the sales process is the #1 driver for dashboards of this type. Executives want to know the sales pipeline, salesperson productivity, and other departmental metrics that can help predict whether or not the revenue target will be met. And if not, provide enough insight to take prudent action. But just as important are the costs of sales and marketing efforts that are helping drive them. Common sales and marketing dashboard KPIs include:

• Sales by region, department, or person
• Costs of sales
• Fulfillment backlog
• Marketing costs payback
• Marketing budget
• Marketing performance vs. goals

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Top executives and sales managers need both high-level and granular views of sales operations in order to keep them running effectively. With SAP dashboards, you can toggle different reports, metrics and data sets a lot easier than you can through spreadsheet printouts.

Customer Satisfaction

Another potentially important category of measurements is customer satisfaction. However, identifying a key measure of customer satisfaction might be more difficult. Time spent discussing your operation and identifying how to measure satisfaction, or more importantly dissatisfaction, can pay dividends as you attempt to grow your business. Potential measurements for this area might be:

• Satisfaction measurements
• Net positive promoter score
• Customer order fulfillment statistics
• Stockouts
• Customer complaints
• Complaint resolution over time

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This SAP Business Objects dashboard makes quick work of analyzing customer trends, both by providing visual metrics and also point-and-click access to what-if scenarios. We often talk about the benefits of having a “single view of the customer,” and dashboards are a great way of managing all the metrics you need to make it happen.Five Factors for Successful Dashboard Initiatives

Here are five key factors that help influence difference between marginal and outstanding results. These are based on thousands of dashboard initiatives we have helped SAP customers implement over the years:

1. Define KPIs carefully and scale gradually. Effective KPIs measure results in terms of defining action and improvement, rather than merely monitoring performance. By selecting a few key metrics to begin with, organizations can obtain initial successes and add more strategic elements and complexity in subsequent phases.
2. Management support. Dashboard initiatives require the support of at least one senior executive who understands business challenges, and has the authority to ensure the project has the resources and buy-in required. Senior executives must remain involved to keep the initiative on track. Often dashboard projects begin with great focus, but attention shifts to other priorities, and those involved lose interest. Without ongoing, high-level sponsorship, dashboards projects are at risk of losing momentum and becoming irrelevant.
3. Simplicity. Dashboards should be easy to implement; understandable by most employees; and use and provide actionable information with an appropriate mix of operational, financial, and company specific KPIs.
4. Set an adequate budget. Like any IT initiative, there are many reasons why a dashboard project can run over budget. Often times it’s not the base software cost that goes over. Rather, it’s the cost of customization and implementation—especially at companies that are new to dashboards. We recommend working with one of SAP’s implementation partners, and using their standard methodologies to help keep projects on track.
5. Use the right software. Often, when an organization decides to begin a dashboard initiative, executives turn first to the software they have in house. Buyer beware: There are thousands of dashboard vendors, but only a few that will make sense for your business. Ideally, your dashboards will draw from a centralized information source, which integrates all the key areas of your business.

SAP’s Dashboard Offerings Available Today

No matter how you plan your dashboard initiatives from here, SAP can help. To get the most out of your current investments, we suggest joining our user groups and forums to see how they are managing their analytics and other business issues. And if you are looking to expand your business management software capabilities or add custom dashboards for your business, please call Akili today.