Using Business Intelligence Dashboards to Mitigate Business Risk

“Business risk comes from not knowing what you’re doing,” says Warren Buffet. When starting a business every single entrepreneur makes mistakes due to lack of knowledge. However, by using business intelligence dashboards you can mitigate business risk simply by; eliminating guesswork, improving efficiency, and understanding what your current situation is.

Official Definition: A business intelligence dashboard is a data visualization tool that displays the current metrics and key performance indicators for a business. They may be tailored for a specific role and display metrics targeted for a single point of view.

Example of a Business Intelligence Dashboard

 

*Dashboard at: 68% Month 3*

Above is an example of a business intelligence dashboard.  To demonstrate the usefulness of a dashboard let’s look at an example. Say we are trying to optimize our website and our goal over the next four months is to go from a (website visitor to paying customer) conversion rate of 1% to a (website visitor to paying customer) conversion rate of 10%. To measure our efforts we create a dashboard as shown above, with the 0% representing a 1% conversion rate and the 100% representing a 10% conversion rate. Three months in we have accomplished 68% of our goal which is a conversion rate of 7.12%. By using this information on our dashboard we can prevent risk in the following ways:

Eliminate guesswork: In our example what if in the fourth month our dashboard scored a 60% of our goal? By using a dashboard, we can quickly see that there is a problem which needs to be addressed. As entrepreneurs our next course would be then to take action and come up with a solution. Having the ability to measure results in an easy to read and understand way eliminates the need to guesstimate.

Improve efficiency: As an entrepreneur our time is already crunched as is; therefore, having a tool that improves efficiency is highly valuable. Dashboards improve efficiency by providing us with a quick overview of how our processes are performing, what corrective actions need to be taken, and where our company’s strengths lie.

See where your business has been, where it is now and where it is going: Going back to the website conversion rate example. For each month that goes by we will take a snap shot of our dashboard. At the end of the four months we should have four dashboard pictures. This way when we analyze the results we have a clear overview of exactly what happened.

Now it’s your turn. What are some other benefits of using a business intelligence dashboard?