Identify key metrics
The important metrics identified include the sales revenue level, net profits annually, total long-term debt, equity capital and sum variable costs in a year. These particular metrics are selected because of their significance in terms of showing the financial performance of an organization. Many external stakeholders of a business always evaluate the status of a given organization based on its level of sales revenue. The total sales revenue indicates the size of customer-base for a given company. Additionally, many potential investors and financers often look for the debt-equity ratio of a company’s total capital. The business process considered in this paper is financial analysis. These are the key metrics identified for consideration in this paper.
Suggestions
The process of designing dashboards is a critical one and requires maximum attention and caution so that no mistakes are committed. It is vital to note that designed dashboard must take into account the key metrics that are of high interest from the external business stakeholders such as customers, investors and financers. Importantly, users usually turn to the dashboards as a metrics management solution, which gives them information about the organization (Ballou, Heitger & Donnell, 2010). This information is what enables them to make informed and well-reasoned solutions. Therefore, a number of suggestions have to be considered in order to design a dashboard that best displays the identified key metrics.
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The dashboards must contextualize the key metrics identified for them to be meaningful. Users of the dashboards have to easily comprehend what the key metrics imply so that they make accurately informed decisions. The key metrics identified in this paper such as sales revenue, variable costs, net profits and debt are normally expressed in the form of data. It is vital to understand that data is only meaningful when it is put in specific context. Therefore, users of dashboards need to see the key metrics in a specific context (Few, 2008). It is, thus, recommendable that designers of the dashboards take time to learn and understand the exact thing, which the users of contextual information need. For instance, the users of dashboards in financial analysis process would want to monitor the actual expenditure against the budgeted target.
Knowing the end-user of the dashboard is also an important requirement before setting out to design it. The designer should understand the needs of the end-user, who is basically an external stakeholder (Brath & Peters, 2004). The end-users always require dashboards that respond to their informational needs. Knowing the end-users of the designed dashboard well makes it possible to have customized organization and displays that function best for them. In fact, the designer needs to work with the end-user so that they can identify the kind of metrics required.
Consideration must also be paid to the concept of data retrieval. The end-users of the dashboards must have confidence in the integrity as well as veracity of the key metrics used in managing the business. They must understand and be certain that they are using facts, but not mere approximations and assumptions. Satisfying this noble requirement demands that the dashboard designers evaluate the sources of data used properly with a view of ensuring they are credible and impeccable.
A well-designed dashboard has to provide users with the current synthesis as well as the details of important metrics. Data must be collected and presented regardless of its form and location. Data may be located across various databases. The required data must be retrieved and presented in the dashboards. However, this data must be refreshed in accordance with the needs of the end-users.
The final suggestion is that the dashboard must give the users that chance to have the choice of views. The users have to be afforded the opportunity of viewing the key metrics presented in different ways. It is important to always know that each stakeholder has unique and specific concerns about the key metrics of interest. Moreover, dashboards need to be consistent and coherent in terms of the information presented.
Type of dashboard
The strategic dashboard is the type relevant for this business. This type of dashboard will enable the business to track the identified key financial metrics like sales revenue, profits, debt and costs in order to establish the level of performance achieved by the organization. It is vital to understand that data used in the strategic dashboard updates itself on a recurrent basis. Its purpose is to make stakeholders understand the status of the organization and point out strengths as well as weaknesses. Where weaknesses are identified, then improvement actions are suggested. The strategic dashboard is released to external stakeholders so that they can use it to critically evaluate the performance of the executive management. The users of this strategic dashboard always have independent interpretation of the data presented and use it to also make decisions regarding their investments and financing relationship with the organization.
Key variables involved in the visual perception
The visual perception of the dashboard has to involve various variables. The first visual perception should be pie charts. The pie charts should display variables such as the debt-equity ratio and the share of profits by every category of goods. Another important visual perception for this business should be the graphs. Graphs should show the comparison of total sales revenues earned in the current year and those for the previous years. Other variables on graphs should be net profits and the average variable costs. Tables should also be used to present data analysis, where main variables has to be costs, profits, expenses and earnings. These visual perceptions are important in dashboards because they show the trend of variables in the financial metrics of the company.
References
Ballou, B., Heitger, D. L., & Donnell, L. (2010). Creating effective dashboards: How companies can improve executive decision making and board oversight. Strategic Finance , 91(9), 27-32.
Brath, R., & Peters, M. (2004). Dashboard design: Why design is important. DM Direct .
Few, S. (2008). With dashboards formatting and layout definitely matter. Perpetual Edge . Retrieved from http://www.perceptualedge.com/articles/Whitepapers/Formatting_and_Layout_ Matter.pdf on 29/6/2017.
