We hear a lot of buzz around real-time information and dashboards, but how do you define real-time and what exactly goes into a dashboard? It’s not about the volume of data. It’s about gathering the right data that allows you to take action quickly.
Here are some pointers on meaningful dashboards and on how to set up a system so that real-time information is available to all decision-makers.
First, using your long range strategic plan, break down the business goals into a set of near term objectives to be achieved.
Next identify how each team or individual contributes in achieving those objectives and then assign deliverables in increments of measurable 90-day milestones. These individual contributors are your “value drivers”. For example, you may compare current sales against where you need to be according to the planned projections. Say your sales were at $20M at the end of Q3 but projections indicate you want to be at $22M at the end of Q4, a 10% increase or $155K in additional sales per week for the next three months. With that milestone set, the value drivers or sales team responds by identifying the programs or actions they must take to execute.
To determine funding for the 90-day milestone window, establish a 13-week cash flow forecast indicating very specifically all the sources and uses of cash. This alone is a powerful tool in understanding the variables in your business that affect your cash position. This exercise is also very important in letting you know how sensitive your cash availability is to fixed and variable conditions. The cash flow forecast is a rolling measure of the over/under success in achieving the 90-day milestone plan.
With the combination of the 90-day milestone plan and the 13-week cash flow forecast you have the metrics to track performance for sales, operations and senior management.
A balanced scorecard is used to track the performance of all segments toward their milestones. The level of the value driver determines the frequency of reporting and determines the type of dashboard report required. Individual contributors that are activity driven may have daily or even hourly reporting goals. Supervisors may have daily flash reports to assess whether resources were utilized as planned. Managers may use daily/weekly statistics to spot indications of a developing trend.
Whatever the level and frequency, real time information flow is essential to taking quick action if the metrics are not reached. This is where you want to decide on a reporting facility, dashboard or other, which matches daily, weekly and monthly information to the reaction time needed to affect change in your value drivers’ performance.
With direct linkage between actual results and planned results, better decision making improves the probability of success. And with faster information flow, decision-making leads to a competitive strength.
Create dashboard reports with the RIGHT data to drive future results.
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Rudi Scheiber-Kurtz is CEO of Next Stage Solutions Inc, a leading financial advisary firm. Next Stage Solutions provides financial acumen and business insight with innovative, strategic and tactical solutions.