Common symptoms
- Each area brings its own data, taken from different systems and using different criteria.
- Reports are prepared manually every month and arrive late.
- There are many indicators, but it is not clear which ones matter or what value is considered good.
- What has already happened is analysed, but not compared with the budget or the forecast.
- Meetings end without specific decisions or assigned owners.
A single version of the data
The first step is for the whole committee to work with the same information. This requires defining each indicator only once (what it includes, which system it comes from and how often it is updated) and obtaining it automatically. A business intelligence tool such as Power BI brings together sales, production, logistics and accounting data in a single dashboard.
A few well-chosen indicators
A management committee does not need to see a hundred indicators. It needs a few that reflect the company’s objectives, with their target and trend. For example:
- Sales and margin against budget and against the previous year.
- Cost per unit produced or per order delivered.
- Customer service level.
- Inventory, and days sales and payables outstanding.
- Cash flow forecast for the coming months.
The rest of the information should be available to those who need it, but should not take up meeting time.
From data to decision
An effective meeting follows a simple structure: a quick review of the indicators, analysis of significant variances and decisions with an owner and a deadline. Variances should already have been explained by the relevant area, so that the meeting is spent deciding what to do rather than finding out what happened.
Common mistakes
- Building the dashboard without the committee. If the decision-makers do not take part in choosing the indicators, the result does not answer their questions and ends up being little used.
- Automating unreliable data. An indicator calculated automatically from poorly recorded data is still wrong. Reviewing data quality is part of the project.
- Measuring without a target. An indicator without a reference value does not tell you whether the situation is good or bad. Each key indicator should have a target and an owner.
Where to start
A large project is not necessary. The usual approach is to start with the five to ten key indicators, agree their definitions, automate their calculation and use them in the committee for several months. From there, the dashboard is extended according to real needs.