Scorecards and dashboards are two entirely different approaches to performance management, measurement, and reporting. While both are related to business intelligence and business performance management (BPM), each serves a specific, unique purpose.
Scorecarding is about objective setting and goal alignment. Dashboards provide visual, intuitive ways to display decision-making data. Together, scorecards and dashboards enable business users to effectively gauge, measure, and understand performance in "at-a-glance" fashion.
Like any BPM or business intelligence application, a scorecard or dashboard is only as good as its underlying data. As such, scorecards and dashboards that are tightly integrated or unified with the overall BPM system are therefore recommended, given their ability to display real-time (or near real-time) performance data -- the basis of better reporting and subsequent decision-making. A system that melds scorecarding and dashboards with such processes as budgeting, planning, consolidation and financial reporting ultimately delivers more trustworthy, consistent and accurate performance data.
Scorecards: Managing performance
Based on the "balanced scorecard" methodology made famous by Kaplan & Norton, performance scorecards provide business users with an intuitive way to align business goals to personalised objectives and report on business performance in "at a glance" fashion. They enable companies to link business strategy with key performance indicators (KPI’s) at the divisional, departmental, and employee level, and communicate them across the enterprise.
Scorecarding benefits include increased accountability, better prioritisation, more effective communication and collaboration, and tighter corporate alignment. Since scorecards are inherently "cross-functional" in nature, taking into account both financial and operational measures of performance, this makes the practice of scorecarding particularly well suited for enterprise-scale deployment.
Typical scorecarding features include centralised KPI (key performance indicator) management, real-time status indicators, flexibility and customisation, and web-based access. More advanced scorecarding solutions enable drill-down and drill-through capability, ideal for understanding and analysing performance variances. The most sophisticated solutions include a predictive component in the form of automated variance and root cause analysis. Used in tandem, features like these enable the greatest understanding of past, present and even future performance.
Scorecarding solutions should include:
- unification with other critical BPM applications (such as budgeting and forecasting) at the interface and database level, ensuring accurate, real-time measurement
- the ability to predict future business performance through automated variance detection and root cause analysis
- intuitive library of key performance indicators (KPI’s) for quick scorecard definition and creation
- direct drill-down from the scorecard to any level of underlying detail
- the ability to extend scorecarding "to the masses", enabling every business user to plan, understand and leverage their performance
- flexible and easy to customize for any type of scorecarding, balanced or otherwise.
Dashboards: Reporting in a flash
Considered by many a "subset" of scorecarding, dashboards provide a highly visual reporting and analytic environment for better understanding business performance, but the two primary differences between them are:
- where scorecards focus on defining, managing and measuring performance targets and results, dashboards serve to present performance-related data in simple, easy to consume fashion
- where scorecards are generally tabular in nature (rows and columns), dashboards deliver multidimensional visualisation effects such as bar graphs, pie charts, meters and gauges to communicate information more effectively.
In explaining the dashboard concept, the most common analogy is to that of a plane's cockpit. At a glance, a pilot can readily assess the state of the plane's performance in terms of fuel consumption, altitude, engine temperature, and other vital flight data. When applied to organisational concerns such as understanding product profitability rates, customer churn percentages, and product stock levels, it becomes easy to see why coffee and the corporate dashboard are a manager's preferred way to start the day.
Like scorecards, more advanced dashboard solutions enable users to drill-down to more detailed performance data, as well as drill-through to underlying transactional data sources. And like scorecards, the most sophisticated dashboard solutions embody predictive capabilities in the form of root cause analysis and guided analysis.
Discover how Moore Stephens Consulting ‘bIntelligent’ BPM solutions, can help you meet your scorecarding and dashboard requirements. For further detail please email info@bintelligent.co.uk
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