Data Dashboards: Definition, Benefits & Tips

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Small business owners have a lot of things to track on a daily basis, not to mention the broader goal of growing the business and the bottom line. Data dashboards are a visual tool that can help you avoid having to look in many different places for information about how your business is performing.

They can provide validation when your team is knocking it out of the park and can also help you know where to focus when you are losing ground in a key area. Data dashboard software will help you look at this information privately or display it for your team publicly to help keep everyone on the same page.

Data Dashboard: Definition

Data dashboards are data visualization tools that can help you keep on top of the pulse of your business. They are typically displayed on a monitor screen and include performance indicators like:

  • Units sold
  • Calls answered
  • Social media performance
  • Retention percentages
  • Expansion percentages
  • Areas of top performance
  • Areas of low performance

Data dashboards can track any data that are key to your business's performance. To determine which areas to measure on your dashboard, look at your company's top priority, mission, vision, values, goals and projections. Anything related to these areas that is measurable can be represented visually on a data dashboard for you and your team.

Data Dashboard: Purpose

Data dashboards take the stress out of finding information on key performance indicators by automating them to all appear in one place. The purpose of this is to:

  • Save you and your team time
  • Keep your team on the same page
  • Help you know what to celebrate
  • Help you know where to focus more effort

For instance, your data dashboard software can show your team that you have already exceeded projections for selling product A, but you are behind in selling product B. This can help them naturally focus on strategies for product B so it doesn't get lost in the shuffle of product A's success.

As a business leader, data dashboards can also save you time and help you know how to best lead and encourage your team. You will have important data at your fingertips for your next investor or board meeting as well as an idea for how to tweak projections and goal setting for the next quarter. This frees you up to focus on business growth rather than the busywork of constantly chasing down all the data.

Data Visualizers vs. Data Dashboards

Data visualizers and data dashboards are related, but they are not always the same thing. Data visualizers are any graphic representation of key data in your business. They can be used alone, embedded in technology or even included in paper reports. Data visualizers do not always have to be part of data dashboards, and they are used in many ways.

Data dashboards are a compilation of a variety of data visualizers in digital format. The data visualizers are often updated regularly or in real time and cover a wide variety of topics pertinent to your business.

On a data dashboard, examples of visualizers could include a social media visualizer, a bottom line visualizer, a fundraising visualizer, an investor visualizer, an innovation visualizer or a donor visualizer. Your company's data dashboard will include several data visualizers in one place to help you stay on top of what matters most.

Benefits of Data Dashboards

Data dashboards have the potential to help you streamline performance in your business and empower your team to more easily meet or exceed projections. It can be so much easier to tune out what is not essential to everyday work when the essential performance indicators are in front of you daily. Think about some of the benefits of data dashboards:

  • Clarity about what matters
  • Increased focus on growth
  • Increased morale
  • Decreased spending on nonessential efforts
  • Increased efficiency
  • Increased transparency
  • Easier decision making
  • Increased accountability
  • Dynamic work experience

Imagine your team coming in to work each day and being able to see the progress they've made, where they are and where they are going. You wouldn't have to go into as much depth at team meetings, and employees would be accountable for checking the numbers before starting work. This helps them know where to focus their efforts at work that day so they know and feel that their job makes a real difference for you and others.

Limitations of Data Dashboards

While data dashboards can be helpful tools for efficiency, communication and focus in the workplace, they are not without their limitations. A data dashboard is only as good as the data visualizers included on it, and those visualizers are only as good as the databases informing it.

This means that if you visually represent performance indicators that are not key to your mission and vision, they can actually distract from the growth of your company. Similarly, if your databases are not automated, accurate or kept up to date, the data dashboard could be flat out wrong.

When the data dashboard is wrong due to poor choice of performance indicators or poorly maintained data, lots of things can go wrong in your business. Employees might focus their time and energy on the wrong items, costing you money and slowing down growth. You might make big decisions without all the information and put your company in a pickle. To ensure that your data dashboard actually works for your company, it is vital that you put a lot of thought into what is represented and how it is represented.

Creating a Data Dashboard

When working with your data dashboard software, one of the most important parts of creating a dashboard is deciding on the type of information you want represented. Be sure to include quantitative information that details results like units sold or calls answered, and don't forget qualitative data that measures things like morale or customer satisfaction.

Consider the following four types of data dashboards:

  • Innovation dashboard: Helps employees align actions with innovation and creativity.

  • Strategic dashboard: Helps employees align actions with your business's strategy.

  • Operational dashboard: Gives employees a snapshot of overall company performance.

  • Analytical dashboard: Informs future decision making based on past trends.

Components of a Data Dashboard

Within any type of data dashboard, you will display a variety of visual components or data visualizers. These visualizers could include pie graphs, bar graphs, line graphs or Cartesian graphs. These components might represent data like:

  • Investments
  • ROI
  • Priority jobs
  • Priority customers
  • Industry trends
  • Capabilities
  • Technological advances
  • Opportunities
  • Top performers
  • Competitor awareness

Updating Your Data Dashboard

Once the components of your data dashboard are in place, it is vital to create a database strategy for how data is collected, automated and then reflected on the data dashboard. Regular system audits can help to alert you of any problems before your business gets too far off course. During an IT audit, internal or external auditors will ensure that your databases are accurate as well as prescribe recommendations for how to improve their function.

You will also need to update your data dashboard as you achieve goals, exceed projections, change direction, alter priorities or change your vision and mission. Data dashboards are dynamic and need to reflect the current values and aspirations of your company in order to help get you where you are going. So, next time you have a big brainstorm for a change in strategic direction, make sure your data dashboard reflects that to keep your team on track.