Dashboard tools help CFOs share information easily

Ask a handful of chief finance officers which key performance indicators (KPIs) they monitor on a daily basis, and you get a wide range of answers. Advertisements placed for the following month, day sales outstanding, earnings before interest and taxes, net working capital, non-billable hours and the cost of deploying aid to a disaster area are just a few of them.

Of course, some variation is to be expected. The selection of KPIs is influenced by all sorts of things, ranging from the size of an organisation and the types of activities that it's involved in, to its short-term goals and long-term strategic plans – and not all KPIs merit daily monitoring.

Ask the same finance people what sort of software they use to measure their chosen KPIs, and the answers are less wide-ranging. In many cases, people seem to stick with their old favourite – the spreadsheet.

"Our business system has zero reporting capability built in," says Glenn Johnson, CFO at Palmer Johnson Power Systems, a transmission and axle specialist. The system does, however, collect information in real time and store it in a SQL database, so Johnson uses Microsoft Excel to dip into this and get the data he needs for the 20 KPIs he checks daily.

"I can get a quick pulse (or spot errors) in less than five minutes a day with this report," he says.

It's a similar story at Lincs FM Group, a regional network of nine radio stations, where the information for one of the most important KPIs is contained in the accounting system.

"Advertising orders go directly into the system as they are placed, so I look each day to see what's on board for the next month and the one after," says the network's finance chief Nick Rawlins, who then compares the orders with those taken in the previous year.

"We also need the listening figures for any point during each 24-hour period," Rawlins says. This information comes from an external provider, Radio Joint Audience Research (RAJAR), and these two sets of KPIs are then used to determine the best time to run the advertisements.

A dashing future

Many of you will probably find something familiar in both of these approaches, because for what seems like eons, business systems – for accounting, customer relationship management, enterprise resource planning, human resources, and more – have proven themselves to be brilliant at collecting data, and less brilliant at turning it into useful information.

Some of you have probably lost count of the number of times your heart has sunk at the news that a report can be produced only with the assistance of the IT department or investment in yet another expensive business intelligence (BI) or performance management system with the assistance of the IT department.

But as dashboard tools are becoming increasing available, accessible and affordable, it is getting easier for those in businesses of all sizes to get access to the KPIs or 'information highlights' they require without the support of either relatively costly systems or the assistance of the IT department.

"At one time, if you wanted to bring together the information in all of your disparate systems you needed to merge everything into a datacentre or use traditional BI tools," says Roger Stocker, a director at Intuitive BI. "As that meant an investment of £100,000 or £150,000, there were always lots of other things to spend the money on."

Page Break

There still are, of course. But the latest generation of dashboard tools don't require an investment this big. Dashboard features have now been added to all sorts of systems (including Excel), vendors have created dashboards to sit on top of their various business systems, there are pared down dashboard-based BI systems, and there are web-based performance management systems with dashboard interfaces. All of which has put user-friendly dashboards and the at-a-glance views they can provide into the hands of businesses that could not previously afford them.

"Dashboards have developed into their own niche market," reports Lyndsay Wise, a business intelligence analyst and president of WiseAnalytics, "and this new and expanded approach is allowing lots more organisations to get a daily or intra-daily view of how they are performing."

Some of those in the finance function are benefiting – and in a variety of ways. There are role-based dashboards that have been configured specifically for CFOs, dashboards tailored to the needs of CFOs in specific industries, and dashboards that can address functions ranging from accounts payable to fleet management, or focus on specific areas such as cash flow and profit.

Debbie Vander Bogart, director and finance general manager at the Levi Strauss shared services centre, has used an accounts payable metrics dashboard to track productivity.

"We identify a key 'best practice' component, such as days purchases outstanding, and then use this to drive change and improve the process," she says.

Paper manufacturer Boise has also used dashboards to save 520 man-hours.

"We no longer need somebody to spend two hours every day manually running multiple reports from multiple systems," says its maintenance services manager Monty Bryant, who has improved decision-making, increased productivity, and prevented extra infrastructure and resource costs thanks to the use of dashboards.

Bringing finance to the people

At design and innovation consultancy Continuum, a range of dashboards are being used to provide managers across the organisation with better access to finance and non-finance information.

"Department managers can go into the software and look at their dashboard report, and when they have questions about what's in a number, they can drill down from this and access all of the underlying data," says Jim Ahern, CFO at Continuum. Having instant access to information through a series of graphs and charts has improved understanding of financial data, company-wide collaboration and alignment, and the quality of decision-making.

ShelterBox, a UK-based charity that delivers tailored survival toolkits to areas hit by disaster, is also exploiting the instant visualisation that comes with graphs and charts to help those inside and outside finance monitor KPIs and understand finance data, using dashboard software (including modules for bill of materials, purchase order processing, work orders, purchase ledger and financials).

"Currently we have around 15 people using the dashboard," explains ShelterBox accountant Rob Evans. "Everyone in management uses it to track the overall performance of the organisation and our eight key performance indicators," he says, though how those KPIs are conveyed varies.

"We can tailor each individual view to what the user needs or wants to see, and cater to the various managers' need for key facts and key data," Evans says. "My personal dashboard layout is focused on transport and materials, as those are the main costs," Evans says, who chooses to visualise these with bar charts.

Page Break

"Finance lends itself to bar charts and pie charts very well, as they are very easy to look at," he explains, "but we also have some line charts for trends and a couple of speedometers for threshold alerts, such as the stock value and bank balance." A dashboard also tracks disasters, and plots them onto a map view, so that ShelterBox can immediately see what has been deployed and where.

The ShelterBox finance team is also using dashboards to make financial reports available to non-finance managers, no matter where they are. "This is so useful. All my management accounts and the latest month's figures are dropped in with a link to a PDF. When our senior management are out in the field, they always have access to the latest management data," says Evans.

So finance is seen as adding real value. "As an organisation we need to make decisions incredibly fast and the dashboards help us to make sure that the basis of these decisions is solid and sound," he adds.