Financial Planning & Analysis and Performance Management

8DASHBOARDS AND KEY PERFORMANCE INDICATORS

CHAPTER INTRODUCTION

The use of performance measures and dashboards has exploded over the past 20 years. The effective use of key performance indicators (KPIs) and dashboards is illustrated throughout this book. This chapter will deal with some specific techniques in selecting and developing measures and dashboards.

OBJECTIVES OF DASHBOARDS AND KEY PERFORMANCE INDICATORS

Organizations that effectively use performance measures and dashboards spend a great deal of time thoughtfully selecting appropriate measures and developing dashboards that are relevant to the organization's objectives and challenges.

Too often, organizations adopt measures or start using so‐called canned dashboards without properly vetting what should be measured. Before jumping into key performance indicators (KPIs) and dashboards, it is very important to develop a context and framework, as explained in the preceding chapter, an introduction to business performance management (BPM).

As a potentially very useful part of BPM, we must start by focusing on the objective of BPM. We want to provide executives and managers with the information they need to run the business. The cockpit of an aircraft provides us with a very useful visual to guide us in the selection of measures and the development of dashboards. I reflect on this image frequently during any BPM project (Figure 8.1).

FIGURE 8.1 Space Shuttle Cockpit Instrument Panel

Photo used with permission of ...