When opening a dashboard, you as a viewer would expect to see a variety of many cool features and visualizations to represent data. If the visual artist needed to share a lot of information and facts, you will probably also see some KPI tiles on this dashboard.
To keep to the definition of data visualization, which is primarily to facilitate data understanding, the KPI tile is a vital part of your dashboard design process. However, let's take a step back and see where this visualization originates from.
KPI - Kompressor Petrol Injection?
Not really, KPI stands for 'Key Performance Indicators' and are already existing quite some time in the data visualization world. The first time the word KPI was used, was back in the 1990s when a certain mister Kaplan and Norton decided to come up with a tool to measure business processes: the balanced scorecard (BSC). This scorecard consisted of visualizing data in a way, that it could help the viewer achieve certain strategic goals of the company on all functional levels and not only financial, which was the only measurable fact back in the day to drive the business.
Still, on this day, the balanced scorecard contains KPIs that are designed to measurably show how progress is being made. The value of such a KPI is directly related to a strategic goal related to one or more perspectives of the balanced scorecard. It can be related to certain objectives as well, to indicate whether the process is performing well. Or it can be related to an evaluation, to follow up a certain process to make sure that other critical processes are still on the right track.
The main goals of the KPI tile
KPI tiles are often used in dashboards to show a quick insight into what is going on with your critical business processes. It comes in handy when the viewer does not have that much time to analyze the data. A KPI tile is often programmed in a way that it needs to stand out from the other visuals, in a form of visual objects, like a traffic light, or by displaying the facts in a certain colour.
Tips and tricks to create powerful KPI tiles
Below you can read tips and tricks to create powerful KPIs, where the focus lies on facilitating data understanding. To understand the concepts more clearly, please find here the start of our journey, a not-so-good-looking KPI tile:
From a business perspective, only someone who works with this data daily can maybe conclude if this number is good or not. It is a fact, it is a number, but it does not tell us anything. We can look at it, but we cannot derive an insight of it.
1. Add context (trend, comparison, target)
A KPI tile without context is like a blockbuster with no main characters. You feel that it has potential, but you just don't understand what it's all about. With the help of a context, you can clearly make sure that you guide your viewer towards a certain goal.
You get answers on things like:
Are we reaching the target?
What does the trend look like compared to last month?
How do we compare to others in the same category?
Here you have an example of the above KPI, where you can see a clear context:
As you can see, the number now turns into something more valuable. We can see that the number has increased by 65% compared to last year, which feels great! But if we compare it to the target, we see as well that we only reached 50% of the target (were we too ambitious?)
2. Make it actionable
Often you see KPI and actionable in one sentence. And this is often a challenge to generate such a kind of number, as this involves a particular kind of 'prediction' to provide this kind of information. However, this is often 'golden' information for your viewers.
Examples of an actionable insight could be:
How many sales do we need to do daily to reach our target?
Which other business processes need to change to minimize a negative margin?
Which categories are causing the biggest portion of the decrease in last month's data?
Again, let's take a look at a reworked KPI tile to show some actionable insights:
3. Keep thresholds simple
Having a KPI with too many thresholds can be confusing. The main goal of a KPI tile is to share information quickly, which means that having too many thresholds can work confusing. Having three is the ideal scenario. Also, pay attention to the inclusion of your thresholds and that you include all the values in your specified range.
4. KPIs should be established for all business processes of an organization
Measuring KPIs is one thing, but measuring too many KPIs focusing on one single process is often misleading. There could be a potential relation between those KPIs meaning that if one goes bad (or good), the other KPIs follow along. To act fast, try to come up with KPIs that cover your full process, and where other KPIs visualize other critical business processes.
Conclusion
Key performance indicators tiles are here to stay, that's for sure. They often hold an additional opportunity to show a real insight instead of just a number. With the help of context, thresholds, and business definition a KPI tile can become actionable. For analytical purposes, having a KPI for each business process is critical to becoming data-driven, and taking actions out of your dashboard.
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