If you want to improve the operational efficiency of your business, a dashboard software could be a useful tool. This software helps to measure business health and performance and generates feedback that promotes continuous improvement in your business. It is a visual management tool that presents Key Performance Indicators (KPIs) which helps your team focus on achieving goals and generating new ideas for improvements.

Simple example

An example of how this tool works that everyone is familiar with is a car dashboard. It features indicator lights that show not only speed and distance traveled, but also things like fuel level and engine temperature. When you drive, you have inevitably made decisions based on the information provided in real time by this dashboard. Dashboard software is as essential to running your business as a car dashboard is to driving. A good dashboard should display KPIs (or metrics), targets, results, and the gap between targets and results (or opportunities for improvement).

What is a good key performance indicator?

While there are well-established dashboards as well as common functional metrics, the basic question to ask yourself is, "Is this performance indicator really useful to me?" For many businesses, they only have one chance to create a quality product. As quality is what sets us apart from our competitors, it is essential that one of our key performance indicators relates to product quality.

This leads us to the two types of KPIs: outcome indicators and process indicators. The former are late indicators, which tell us about an event after it has occurred. Process indicators, on the other hand, are leading indicators that are monitored at the process level and may have a “predictive” quality.

It often happens that the outcome indicators relate to the particular physical characteristics of their product after it has been manufactured. A process indicator is a parameter relating to an input in the manufacturing process which has a direct influence on the result.

To take our example with the dashboard of a car, the distance traveled indicated by the odometer constitutes an indicator of results, or late indicator. It is important, but not sufficient to determine the performance of your car.

To get a more complete picture, you need to monitor some of the sub-processes that take place while you are driving, including gas mileage. If the fuel gauge indicates that the tank is almost empty, you will not achieve the desired result (the distance to be traveled) without having to take certain measures, i.e., refuel.