There are lots of tools out there that will take your key performance indicators and show you beautiful KPI charts and graphs. For those of us who love data and feel strongly that having the right information at our fingertips to make informed decisions is critical, this is pretty exciting. Bringing a spreadsheet to life in a powerful visual can really make an impact and help you glean important insights from trends in data over time. That being said, a word of caution—these business intelligence data visualization tools are cool, but they are missing some pretty key pieces of the puzzle—especially when trying to execute your strategic initiatives.
If you are using a BI (business intelligence) data visualization tool, here’s what you might be missing:
1. Focus. More data is not always better. If you are drowning in charts and graphs, your team can’t possibly digest that information meaningfully. Just because you can measure it and turn it into a pretty chart doesn’t mean you should. Don’t succumb to the temptation to add every metric under the sun into your BI tool. According to an article in CIO, companies' number one mistake with BI software is “not defining the business problem(s) you are trying to solve.”
Focus on your business. What are you trying to achieve? What specific, strategic initiative are you solving, and what data do you need to solve it? What are your Targets for this year and this quarter? What are the few things you need to keep an eye on to know that your business is healthy? What numbers must you discuss at your executive team weekly meeting? A focused list of KPIs (10-12) that meets these criteria is going to give you far more value than scrolling endlessly through heatmaps, scatter plots, pie charts, etc. until your eyes cross.
2. Ability to Impact the Numbers. Your business intelligence tools are great at telling you what has already happened. You put your results in, and BAM—a chart comes out! But what about the future? You need a mix of results and leading indicators to help you know if you are on the right track to hitting your goals. Your KPIs should tell you more than where you’ve been; they should help you know where you are going. Some of these tools can help you forecast better by looking at trends over time, but you could be missing an opportunity to make adjustments to hit your numbers if you are only focusing on what you see in the charts.
Suppose you are analyzing your data once a month or even weekly but only looking at what’s already happened. In that case, you may be missing the opportunity to compare where you are with your goal for the quarter or the year, see where you are falling short of your projections, and have the right discussions to come up with an action plan to impact the numbers. You want to move the metrics in the right direction with a concrete plan, not just see the trends in what you’ve already done. It isn't just data analytics, it is about learning about your business.
3. The Story Behind the Numbers. The human element is the biggest value you could be leaving on the table by using a tool like this. The numbers do not tell you the whole story—not even when they are in a pretty chart. There is a human being in your organization who is ultimately accountable for each KPI you are tracking (and if you haven’t clarified one owner for each KPI, you should stop what you are doing and determine that now because if everyone owns it, nobody owns it, and if nobody owns it, you will fail). This human knows something the chart could never tell you—the story behind the number. How does this help you execute the goals in your strategic plan?
Let me give you an example of what I mean by this. Let’s say you have two sales people who are both tracking pipeline for the quarter. They are both supposed to hit the same number at the end of the quarter. Salesperson #1 (we’ll call him Dave) has hit half of his pipeline goal midway through the quarter, and salesperson #2 (we’ll call her Sue) has hit a quarter of the goal at the same point in time. If we are going on numbers alone, we are going to spend a lot of time in our team meeting talking with Sue about how she can get back on track and probably not even get into a discussion with Dave because his number is looking pretty good.
However, what if Sue knows she has three big events planned in the next few weeks that should more than make up for her progress so far? Even though her number doesn’t look as good right now, she has a plan in place and can confidently forecast that she is going to hit or exceed her goal by the end of the quarter. Dave, on the other hand, may be halfway there, but he’s completely exhausted every idea he has to fill his pipeline. He’s already attended trade shows and events, put out new marketing campaigns and reached out to current customers for referrals, but nothing seems to be working. The team’s energy would be far better spent helping Dave than Sue in this case. Without the story behind the numbers, you could miss the opportunity to catch this problem early in the quarter when there’s still time to make adjustments and hit the goal.
In addition to your beautiful data visualization, don’t overlook the need for focusing on a few key metrics, making them actionable and tapping into the human intelligence behind the metrics. At Rhythm Systems, our KPI Dashboard tool can help you stay focused, make adjustments and keep the story behind the numbers front and center. You can build out a detailed project plan for how you are going to hit each of your KPIs and drill in to see how the work is going, including reading comments that reveal the real story. Without these three key pieces to the puzzle, your BI tool is just expensive eye candy.
Looking for more KPI information to help get you started? Check out our additional resources:
Photo Credit: iStock by Getty Images
Photo Credit: iStock by Getty Images