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Is your goal to create a perfect KPI dashboard? Learn from the mistakes of others – here is the list of common pitfalls to avoid.
The road to a perfect Key Performance Indicator (KPI) dashboard is full of potholes. If you are just setting off on this journey, you may find it useful to understand typical pitfalls to avoid. If you are already in the middle of it, explore five common mistakes and double-check your KPI tracking model.
1. Wrong KPIs Identified and Tracked
The most serious mistake is to choose a wrong KPI. A colorful KPI dashboard is worth nothing if it displays a misleading picture. KPI mistakes can be of different nature, which influences how severe they are. The gravest are those related to translating a corporate strategy into KPIs. If KPIs do not support the corporate strategy, the business processes are most likely to be far away from the strategic goals or even contradict them. For example, it’s unlikely that the business will improve customer service, if there are no such KPIs as increasing customer satisfaction by X% and reducing number of customer complaints by Y%.
2. No User Roles Identified
No need to say that every department needs its own KPI dashboard. Obviously, marketing needs different analytics and KPIs than the IT department. The important thing is to identify user roles within a department and customize KPI reporting correspondingly. Otherwise, users will not focus on the insights they need. The department head should see the overall picture of the department, while the unit managers should concentrate on their individual targets.
3. No Drill-down Opportunity for Managers
A manager should have the possibility to look what is beyond a particular KPI. His or her task is not only to monitor a KPI, but also to react if something goes wrong. For instance, if a production company is struggling to achieve its manufacturing cost per unit, the manager can switch to a more detailed report showing which particular product categories are problematic and require bringing them into focus.
4. Careless Approach to Devices
Going mobile is an issue that requires consideration. First, the management has to find out if the employees need to access a KPI dashboard via mobile devices. If they do, then it is necessary to identify the group of future users. An important thing to remember: going mobile means a lot more than having the desktop version open on mobile devices. For instance, it requires a special UI/UX design. Besides, security issues should also be scrutinized.
5. Wrong Type of Visualization
Visualization is so important that its design deserves its own project. While implementing boards, avoid the following mistakes:
- Too Many Insights
The main purpose of a KPI dashboard is to help users spot signals as effortless as possible. For this reason, charts and graphs should not occupy more than one page. That is an optimal volume of information to perceive at a glance. Of course, the user should be able to jump to the next level with more detailed reports for additional insights, if they need it.
- Wrong Color Schemes
Color is an additional tool to ease the perception. Though in theory everybody knows that a dashboard should not be bright, inconsistent and flashy, not every implementation team puts this knowledge into practice.
- Pie charts, gauges and bar graphs mixed together
Deciding among pie charts, gauges or bar graphs, take into account the kind of data to be reflected and choose the type accordingly. Also, keep the balance between the types – try to make the dashboard as consistent, as possible. The more formats – the more difficult it is for the user to switch to a new type.
Even a scale can lead to wrong conclusions if used wrongly. Please, look at the picture: at first sight, a company is way ahead of its competitors, while in reality (and with a different scale), the gap is minor.
Be careful and check if you really measure the progress made. Otherwise, you can find yourself caught up in the activity trap. For example, a retailer announced that their sales reached 15 billion. Looks impressive, doesn’t it? We envisage that the team has done a great job. But will the figures be as impressive if we consider them in the context of growth vs. the previous month or year? Not necessarily. Ambiguity disappears if the bar chart shows the values, as on the picture below.
To Sum it Up
Creating a KPI dashboard is not as easy as it may seem. The process requires a comprehensive approach: from defining right KPIs to visualizing them correctly. We hope that the tips will be helpful to you. We strongly believe that in this case, it’s better to learn from the errors of others than make them all yourself.