Despite good intentions to create performance visibility, many companies chased the wrong shiny object and left EBITDA on the table. Years ago, the “dashboard war room” represented the holy grail of big data. But in reality, few companies delivered game-changing results. Many businesses simply digitized existing reports rather than building strategic dashboards, aligning the entire business around them, and integrating them into decision-making. Companies that missed the mark on digital dashboards have a sizable prospect for faster value creation.
Today, getting from data to results does not require a Herculean effort. Advanced digital technology makes cleansing, manipulating, and analyzing data from multiple streams easy. Highly visual tools can help industrial companies compare machine data with supply chain and finance data to tell an interlinked story. The data is richer and timelier. You can get the key metrics needed to run better business. You can display information in an actionable format for an executive’s desk, a plant manager’s iPad, and an action board for plant floor operators.
And the playing field has leveled. A mid-market business can build and implement the right digital dashboards and supporting management systems in 6-12 weeks. This result previously could have taken 6 months to 2 years. Done right, dashboards help create and sustain alignment, transparency, and data-driven decision-making.
Three common pitfalls to digital dashboards and how to avoid them
1. Data rich, insight poor
Legacy mindsets (scarred from inflexible ERP system implementations) make people scared to touch and trust data. Businesses may do well using data to answer questions of what happened, but not why and what to do about it. Without understanding cause and effect that arises from interlinked data sets, businesses lack accountability and transparency into operations and financial impact. For example, a business may know where defects exist but lack understanding of root cause. Dashboards can help integrate the right data and metrics from multiple systems and processes into a single view. Clients often say they need more data. But they actually have data and need to do more with it.
Getting it right
A large private equity portfolio company was missing manufacturing financial targets for its US operations. The portfolio company collected and reported on a significant amount of operational data but could not isolate the root cause. We helped the company standardize and rationalize key performance data across core operational domains (operational efficiency, labor efficiency, and safety), linking shop floor metrics to management dashboards and financial reporting. By leveraging data management tools, the company could collect and report on select data in real time. This data housekeeping’ exercise allowed the business to forecast financial results with greater accuracy and drive an 10-15% improvement to operating expenses.
2. Disconnected operating models
Many organizations lack the right structures, processes, and operating models to drive improvement from the results. We often see this in manufacturing plants – the alarm goes off and people just turn it off. It goes off so much that no one pays attention to it. Dashboards can show what’s going wrong or on track. But people ignore information if they don’t see relevant facts, especially in organizations lacking a culture of continuous improvement.
Getting it right
A $1B electronics original design manufacturer sought to accelerate its product development time to market. The manufacturer’s clients needed to get product to customers faster, so the only way to win was to beat competitors with speed. We helped them achieve this through improved process, governance, and planning supported by advanced analytics from digital dashboards. Productivity and time to market improvements yielded top-line benefits of $40-80 million per year in a low-growth industry.
3. One-size fits-all, information overload
A front-line operator may need to see more recent/real-time info; whereas a C-suite leader may need to see the same information at a different granularity or frequency. Yet, it’s shockingly rare that companies design and deliver dashboards accordingly. More often, we see a kitchen sink approach, showing every possible metric and making information less actionable. Sometimes few leaders will use digital dashboards, even with strong systems (available data, easy to manipulate, etc.). You can draw executives in by removing noise and focusing on what matters to their business. We pinpoint issues leaders care about and then identify data streams that must be connected, giving them actionable insight into their business. Integrated reports target different views to different business users and prioritize critical metrics and facts.
Getting it right
One of North America’s largest energy companies understood its performance on a daily basis but not over time daily. We helped the company use real-time data and dashboarding to change decision-making, job definition, and process execution—enabling the Digital Oil Field. Aggregating data at the right levels enabled communications and teamwork between leadership and the field. Once the company had more insight into real-time performance issues, it could identify and fix problems right away, yielding a 17% cost per barrel reduction over 3 years.
The business questions of today remain the same as yesterday. How do I grow revenue? Boost profit? Build capability? The good news: data is often available and accessible, and new tools allow for easy interoperability between systems. Leaders who effectively harness these advances will outpace competitors in value capture and build a foundation for the next level: AI-driven decision recommendations on the best course of action.
We’d love to hear other war stories or successes on using digital dashboards to drive faster, better results. Get in touch if you’d like to learn more about how we’ve helped our clients and some best practices that could apply to your business.
This article has been written in collaboration with:
Fred Asbeck | Vice President, Private Equity, SSA & Company
Nick Kramer | Vice President, Digital & Analytics, SSA & Company