When using graphics to create management reporting dashboards, FP&A professionals need to carefully tailor the images to their audience. How that’s done depends on the objective of the message, according to Irena Barisic, deputy chief financial officer of the Brookings Institution. “For the board and for senior management, I prepare materials with a high-level focus, including only the most salient points necessary for decision-making, over the horizon risk management, or as support in strategic objectives development,” she said.
Here are seven tips from practitioners and experts on how to construct an effective visual dashboard.
- Make it relevant. Include only the information that is relevant to the decisions senior managers will be making. Often, finance professionals feel inclined to include all available data and metrics. “This defeats the purpose of the dashboard and will make it difficult to identify key pieces of information that will drive better business decisions,” said Joseph D’Ascoli managing director, Office of CFO Solutions at FTI Consulting.
- Keep the metrics strategic, objective and measurable. Example: In finance, it’s not important to measure the number of projects implemented; we want to know what impact those projects had on company performance.
- Provide a clean, consistent dashboard that conveys insight. Many dashboards include a plethora of colors, graphs, and fonts, according to D’Ascoli. Competing or inconsistent use of color will draw the eye in a variety of directions and confuse the audience as to what the colors mean. A variety of graphs require the reader to continually decipher the meaning, slowing them down as they work to interpret the meaning of each type of visual.
- Make it actionable. It is essential to design effective, actionable dashboards. It is often the case that a report suggests something counter-intuitive to corporate thinking or tradition, so the information included must be defensible and accurate. The design must demonstrate knowledge of business processes in order to inspire confidence, according to D’Ascoli.
- Consider the objectives. According to Barisic, “Before even beginning the dashboard design, I think very carefully about the objectives of the dashboard, the messages that it should convey, the audience who will utilize the dashboard, as well as the frequency of data updating and dashboard dissemination.”
- Make it concise. Barisic sticks to one page or a single screen for at-a-glance review. Anything longer and you risk losing the focus on busy senior managers.
- Keep related measures together. “Measures that are related and need to be reviewed together should be on the same page (basic visual perception and data visualization studies).” According to Barisic, fragmenting data is not recommended when data shown is linked and needs to be viewed together. This is not only important for dashboards, but for the design of other financial management tools as well (e.g., financial system design, particularly data entry screens).
Ultimately, Barisic said, “dashboard design and development is an iterative process. Even when the initial draft is completed and presented to the audience, we should be receiving and welcoming additional feedback on the dashboard itself and how well it is communicating to the audience. This feedback is then incorporated into future iterations of the dashboard.”