You have data pouring in from your various systems—sales, accounting, operations, and others. Expensive and time-consuming techniques— involving software, methodologies, and consultants—all promise to start with your data and end with profitable insights.

What’s the best way to sort out and tie together all these approaches? How can you make the best use of all the data you generate?

A good solution is to build a business dashboard— one page that tracks your top business metrics and performance drivers.

A Dashboard, updated on a regular basis, helps you develop and use insights to move raw data to more profit. A Dashboard can complement existing efforts (such as business intelligence, knowledge management, and corporate performance management) by providing a focused, central repository for gathering and acting on insights.

Let’s use a Data-to-Profit Pipeline framework to see how a Dashboard gets results at each step.

  From data to information

A Dashboard provides a focused display as you consolidate raw facts (i.e., data) and turn them into charts, graphs, or lists that contain trends, comparisons, and relationships (i.e., information). Because a dashboard is high-density and scoped to one page, you are able to observe many items at once without having to flip pages.
3 signs your pipeline may be clogged at this step:

• you produce voluminous reports with data “sliced and diced” many different ways
• management reports contain “favorite” sections and other sections go unread
• you use low-density graphics (e.g., pie charts) or no graphics at all (e.g., tables of numbers)

  From information to knowledge

A Dashboard provides overall context as you work to understand the underlying causes of performance changes. By identifying key metrics and focusing on them, you are able to zero in on opportunities and root causes quickly.
4 signs your pipeline may be clogged at this step:

• you have not made a short list of key performance indicators (i.e., 6 to 20 items) and related metrics
• you have not spotted and documented causal links between profit drivers
• you don’t benchmark your performance to peer companies
• you issue separate reports for separate functional areas (e.g. financials, HR, quality, sales) without tying the results together

  From knowledge to action

A Dashboard provides possible scenarios as you assess current conditions, develop hypotheses, and define specific tasks (i.e., actions) for individuals or groups that could increase profit. Seeing everything in one place gives you a “big picture” perspective and an eye toward amplifying successes and quickly correcting those factors which drag profits down. 3 signs your pipeline may be clogged at this step:

• you don’t create hypotheses for how to improve results based on knowledge gathered
• you can’t see all your profit drivers in one place
• you don’t attempt to spot best practices and transfer knowledge to underperforming units

  From action to profit

A Dashboard provides concise feedback and is a way to monitor the effectiveness and progress of initiatives. It’s also a way to communicate needed actions with your organization and then evaluate and disseminate results quickly. 3 signs your pipeline may be clogged at this step:

• you don’t assign specific actions with due dates to individuals, and then hold them accountable.
• you don’t track and review results relating to specific initiatives
• you don’t change or refi ne actions based on their affect on profitability

Your existing business analysis tools can work with a Dashboard by providing input data or by allowing further investigation of an area on the Dashboard.

A one-page Dashboard (see below) can help unify disparate reports, identify trends and opportunities, improve communication, and keep the data-to-profit pipeline flowing.

Action Points
How to apply this today

1. Identify the key performance indicators and profit drivers for your business. Identify a second level of drivers that feed into the first level. This could be a first step in developing a one-page dashboard.

2. Check your organization's data-to-profit habits by looking for signs of blockage within your company. Make quick fixes if possible.

3. For each of the four “From...to...” steps at left, list your organization’s strengths and weaknesses. Brainstorm ideas for addressing deficiencies and spreading adoption of the best practices. Prioritize this list of ideas and act on at least two items.

About ProfitMetrics Inc.

ProfitMetrics helps companies on top opportunities by creating customized one-page report called a ProfitMetrics Dashboard.

ProfitMetrics Dashboards:

• are used in a range of industries
• allow you to focus on specific ways to increase revenue, lower costs, and strengthen core values
• can create a balanced scorecard for your organization
• are available on a subscription basis, eliminating the need to buy software
• transform your raw data into ongoing reports that highlight top profit opportunities

ProfitMetrics Inc.
2476 Bolsover #400
Houston, TX 77005-2518

www.profitmetrics.com
Tel  (713) 667-5570
Fax (713) 893-2408