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The Starter Guide to Dashboards

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This article is a part of our Starter Guide series. Check out the Starter Guide to Business Intelligence, the Starter Guide to Dashboard Design, and the Starter Guide to Data Visualizations

Dashboards—they’re everywhere! When you think about it, we’re surrounded by dashboards every day. Although they vary, from the dashboard in your car to the Fitness Activity dashboard on your iPhone, dashboards and their data are available at the tip of our fingers.

We are dashboard enthusiasts here at Klipfolio. We love them! And I’ll be the first to say, there’s a lot to know about dashboards. My hope is that article will answer your most pressing dashboard related questions.

By the end of this article, you’ll be equipped with the basics to build, design, and share dashboards that will accelerate your business growth. In this article, I’ll cover:

  • Dashboards: What they are, how they work and how they’ve evolved
  • Why you need a business dashboard
  • Dashboard features and visualizations
  • Types of dashboards and how to choose the right one
  • 5 tips to consider when building and designing a dashboard
  • Additional resources to help you build a dashboard today

So let's get down to it!

What is a dashboard?

A dashboard is an information management tool used to track KPIs, metrics, and key data points that are relevant to your business, department, or a specific process. Dashboards aggregate and visualize data from multiple sources, such as databases, locally hosted files, and web services. Dashboards allow you to monitor your business performance by displaying historical trends, actionable data, and real-time information.

Dashboards actually take their name from automobile dashboards and they are used in much the same way. For the sake of an analogy, let’s look at a car. There may be hundreds of processes that impact the performance of your vehicle if you look under the hood. Your car’s dashboard summarizes this using visualizations so you can focus on what matters most: safely driving your vehicle.

For businesses, there are hundreds of processes that impact your performance if you look ‘under the hood’, so to speak. And with a wealth of data made available these days, managing and extracting value from it can be difficult. Simplifying data analysis and distribution through tools like dashboards is a way to help businesses rev their engines and make smarter, better, faster data-driven decisions.

And a well designed dashboard levels up your approach to information management. Everyone in the business, regardless of role, has questions about your company performance, whether it be campaign performance, new wins, or churn rate. Dashboards bring everyone (and your metrics) together in one place to answer these questions.

What's the difference between a dashboard and a report?

While it may seem like the terms are interchangeable, there are actually a few significant differentiators between the two.

Let’s look at similarities first. Dashboards and reports both:

  • Provide historical data
  • Bring multiple metrics together

Where the differences lie is:

  • Reports are static, dashboards are interactive with live, dynamically updated data
  • Reports share information on known areas of interest or goals
  • Dashboard monitor known areas of interest or goals

Why are dashboards important to my business?

Dashboards are important because they simplify data analysis and distribution. With a dashboard, you’ll save time, gain control of your processes and performance, and avoid data overload.

Dashboards aren’t reserved for executives, either. Dashboards support data democracy—something we’re pretty passionate about around here. Dashboards are used across the business - from marketing teams that use them to track campaigns and conversion rates, sales teams that use them to track opportunities, and executive teams or founders that use them to gain a holistic view of company growth and performance.

How have dashboards evolved over time?

It’s said that the evolution of dashboards can be traced back four decades.

In the 1970s, businesses used decision support systems (DSS) for business intelligence.

A decade later, Executive Information Systems, a management support system that facilitates and supports executive level decision-making came into the picture, but not without challenges. This method of information sharing had slow turnarounds for refreshing and managing data, impacting the speed at which businesses could use data to make decisions.

The 1990s—the decade that the information-age gained traction—meant that data warehouses and analytical processing capabilities increased, taking us one step closer to new and improved dashboard functionality that we’ve come to know.

And fast forward to today. Building dashboards used to be a lengthy process. Now, with lightweight tools like PowerMetrics, you can build a dashboard in a matter of minutes. With no-code or low-code tools on the rise, a technical or analyst background is no longer required to build a dashboard. Dashboards are a widely adopted tool for businesses—from small shops to large enterprise functions—to accurately report on their metrics in a timely manner.

Now that we’ve laid the foundation for what dashboards are and the great lengths we’ve gone through to get to where we are today, let’s answer a question you might be asking yourself: Why do I need a business dashboard?

Why do I need a business dashboard?

When used effectively, dashboards can significantly impact business performance. Here are three common use cases for business dashboards.

1. Get more value out of your data

What does this mean exactly? Data is one of the most valuable assets owned by your business. But what good is it if you don’t use it? A well-designed dashboard is a powerful tool to inform and enable cross-functional collaboration while providing a lifeline to core business metrics. Everyone on your team can find a use for your dashboard and glean meaningful insights that can impact the way that you, and your business, make decisions.

2. Consolidate and automate multiple data points

Dashboards bring multiple metrics together on a single reporting interface. This significantly reduces the amount of time and effort required to compile reports, sign into multiple services or spreadsheets, and share the data across your business. With a tool like PowerMetrics, you can escape spreadsheet pandemonium and connect and automate your data with a few clicks—all you need are your login credentials.

3. Align teams and departments

Data doesn’t lie. When it comes to cross-functional collaboration, dashboards provide an objective view of current performance and can serve as common ground for further discussion. Dashboards are a great avenue to surface metrics that are relevant to each team in a way that’s mutually understandable.

Additionally, with tools like TV dashboards, you can cast your dashboard to a screen in your office so that the metrics that matter most are always visible and always accessible to all teams. This supports data transparency, too!

OK, so we’ve covered what a dashboard is and a few use cases. Let’s shift our focus to aesthetics and uncover what it takes to make a dashboard go from good to great.

The ultimate dashboard feature: Data visualizations

Selecting the right data visualization for your dashboard is a critical element of dashboard design. The data visualizations on a dashboard are the graphical representations of your data. When picking a visualization, consider what the goal is. After all, visualizations simplify the transmission of somewhat complex information. Data visualizations have a sense of ease as well. It’s infinitely easier for an end-user to spot trends in a chart versus sifting through endless spreadsheets.

We’re going to hit on the high-level takeaways for data visualizations in this article. For a more in-depth exploration, check out this guide.

There are three common types of data visualizations in dashboard design:

  1. Tables
  2. Line charts
  3. Bar charts

Let’s take a quick peek at each!

table data visualization

Tables

If you’re the type of person who wants a little bit of everything in order to make data-driven decisions, table visualizations are a good fit. Tables are used to organize data into columns and rows and may contain additional graphical elements such as bullet charts or sparklines.

Use a table to:

  • Display two-dimensional data sets that can be organized categorically
  • Drill-down to break up large data sets with a natural path

Don't use a table to:

  • Display large amounts of data - this can cause the table to be overwhelming

Best practices for table visualizations

  • Be mindful of the order of your data - make sure that labels, categories, and numbers come first then move on to graphics
  • Avoid clutter: try to avoid more than 10 different rows in your table
table data visualization

Line chart

Line charts are used to plot values that show trends over time in a compact and precise format so you can quickly scan to understand trends. Line charts may have multiple series to allow for comparisons. It’s worth noting that the proper use of colour in this visualization is key to allow for easy interpretation.

Use a line chart to:

  • Understand trends, patterns, and fluctuations in your data
  • Compare different yet related data sets with multiple series
  • Make projections beyond your data

Don't use a line chart to:

  • Provide an in-depth view of data (there are other visualizations better suited for this)

Best practices for line chart visualizations

  • Use a different colour for each category you're comparing, and use solid lines to keep it clear and concise
  • Avoid comparing more than four categories in one chart to make for easy reading
table data visualization

Bar chart

You’re probably familiar with bar charts as they are one of the most popular visualizations. Bar charts organize your data into rectangular bars that make it effortless to compare related data sets.

Use a bar chart to:

  • Compare two or more values in the same category
  • Compare parts of a whole
  • Compare less than 10 groups of data (for optimal user experience)
  • Understand how multiple data sets relate to one another

Don't use a bar chart to:

  • Visualize one value in a category
  • Visualize continuous data

Best practices for bar chart visualizations

  • Use consistent colours and labels throughout so you can easily identify relationships
  • Simplify the length of the y-axis label (and don't forget to start from 0 to keep data in order)

To learn more about data visualizations in-depth, check out our guide to data visualizations.

Types of dashboards (and how to choose the right one for you)

There are three types of dashboards: operational, strategic, and analytical. But how do you know which is the right type for your business?

In summary:

  • Operational dashboards tell you what is happening now
  • Strategic dashboards track key performance indicators
  • Analytical dashboards process data to identify trends

Let's look at each in a little more detail.

What is an operational dashboard?

Operational dashboards answer the question: “What is happening now?” An operational dashboard is used to monitor real-time or transactional data against key metrics and KPIs. Data on operational dashboards updates frequently—even up to the minute!

Operational dashboards are designed to be integrated throughout the course of your daily workflow. Operational dashboards often contain contextual information, too, so users can explore the data and use it in the decision-making process.

Metrics you can track on an operational dashboard

What is a strategic dashboard?

Strategic dashboards are used by executives to monitor the status of KPIs. Strategic dashboard data updates less frequently than the aforementioned operational dashboard.

Strategic dashboards are designed to be viewed once a day to support executives in staying on top of organizational KPIs. Oftentimes, strategic dashboards summarize performance over a period of time (month, quarter, year).

Metrics you can track on a strategic dashboard

What is an analytical dashboard?

Analytical dashboards analyze large volumes of data. This allows users to investigate trends, predict outcomes, and discover insights and establish targets based on insights into historical data.

Traditionally, analytical dashboards were developed and designed by data analysts, but the insurgence of no- or low-code analytics tools like PowerMetrics has equipped everyone, from marketers to founders and executives, with the tools and resources required to build an analytical dashboard.

Metrics you can track on an analytical dashboard

Blend all three dashboard types for ultimate success

Now that you’ve gotten a deeper look at each type of dashboard, it’s worth noting that following good dashboard design practices means that PowerMetrics can facilitate all three dashboard types depending on how you configure it. You can learn more about dashboard design and the secrets to an incredibly effective dashboard in our guide to dashboard design.

Tips to help you choose the right dashboard based on business reporting requirements

This chart will help you understand which type of dashboard is the best fit to meet your business goals. The questions will help you to determine why you need a dashboard; the design, features, and training required based on your audience; the metrics to use that will help fill performance gaps; and the ultimate end goal that you’re working towards with your dashboard.

What question are you looking to answer? Best fit: Operational Best fit: Strategic Best fit: Analytical
What problem are we trying to solve? Increased data awareness and access to time sensitive data Line of sight into top-line organizational KPIs Access to trends or deeper insights
Who will use the dashboards? Managers and their teams Directors and executives Analysts and executives
What gaps exist in our performance? Daily performance Monthly, quarterly performance Performance issues, weekly performance
What are our goals? Increased employee awareness and tracking against goals Setting strategic goals, achieving KPI targets Setting analytics goals and increased visibility into key processes

Tips to help you choose the right dashboard based on technical reporting requirements

Technical reporting isn’t meant to scare you off! Like I mentioned earlier, a lot of dashboard tools are now lightweight and more accessible so that everyone across the organization can be empowered to make decisions with data. These technical-focused questions will help you further narrow-down the best fit dashboard for your business needs.

What question are you looking to answer? Best fit: Operational Best fit: Strategic Best fit: Analytical
What is the state of our data infrastructure? Web APIs, databases, spreadsheets Web APIs, databases, spreadsheets, data warehouse Data warehouse, database
Who are the data latency requirements? Low-latency, time-sensitive, real-time Incremental updates, need for accurate, right time information High latency, accurate data
How many data sources are we pulling our data from? Multiple systems and applications to improve visibility Multiple data sources within a single dashboard or set of visualizations Multiple data sources within a single dashboard or set of visualizations

5 dashboard design tips to get you started

I've mentioned our guide to dashboard design a few times throughout this article; it truly is the crowning glory for a detailed deep-dive on dashboard design. But in the meantime, here are 5 quick tips you can keep in mind as you build and share your dashboards.

1. Design your dashboard with your audience in mind

An effective dashboard is one that communicates a clear message. Dashboards are a communication tool, after all! And the first rule of effective communication is to define your audience.

From the very beginning it’s important that you understand who (and how) your dashboard will be used. Depending on who your audience is, your dashboard may be viewed on mobile devices, web browsers, or TV dashboards. These are all important considerations when you start to design your dashboard.

To circle back to the car analogy, like a vehicle’s dashboard, a business dashboard puts the users behind the wheel so they can understand their business performance through data visualizations. Just like when you’re driving a car, you don’t need to understand the specifics of each process underneath the hood. But you do need to be able to assess the car’s performance so you can identify when something is wrong and when you need to address issues. Your car’s dashboard provides just enough of the right information to allow you to manage your vehicle and the same principles should be applied to your business dashboard. It should deliver the right information to the right person at the right time.

2. Identify your key metrics

“What problem am I trying to solve?” This should be the #1 question you ask yourself when building a dashboard. Your dashboard is dependent on the metrics and KPIs you want to track. If you start by identifying the metrics that matter, you’ll have a better idea of the end result.

If you’re not sure where to start, you can check out MetricHQ, Klipfolio’s online dictionary of metrics and KPIs. You can sort by category, service, or even check out the popular metrics. Within MetricHQ you can access Instant Metrics, too. These are metrics that you can add to PowerMetrics with just your login credentials - you don’t need an API key or a line of code to get the data you need.

3. User context

Context is key! When you’re building your dashboard, make sure you consider the context that the dashboard will be viewed. Step one was to identify your audience, so now you have to select the visuals that will be meaningful to them.

For example, an executive may want a compact dashboard with clear, simple visualizations so it can be read at-a-glance. By comparison, an analyst or technical marketer may want to dive deeper into the data with more sophisticated visualizations.

4. Design for immediate action

The strength of a dashboard is only as powerful as its ability to convey the current status of key metrics. Dashboards should prompt a response from your audience, from celebrating wins, to bringing an issue forward to the entire organization or prompting a departmental meeting. A design tip: To avoid confusion with prompts and indicators, always err on the side of fewer colours and symbols.

5. Test, evaluate, and tweak

As you and your team use your dashboard, there will be constructive feedback to improve its use and effectiveness. User-generated feedback enables you to make changes that will benefit your entire team or organization to make it more effective and continue to match the objectives of your audience. Don’t be afraid to ask for feedback! In the end, it will make you a better dashboard builder and designer.

Resources to help you build a dashboard today

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Topics: Dashboards

Originally published June 9, 2021, updated Oct, 07 2021

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