Digital dashboards can create virtuous feedback loops that enable greater innovation and new revenue streams.
By Dan Tynan, Workflow contributor
- A new study suggests a clear link between the use of data dashboards and business performance
- Among other benefits, using dashboards can accelerate decision-making and overall digital-transformation projects
- Deciding what goes into a dashboard helps teams agree on what data is most important
The modern enterprise generates vast amounts of data that executives can use to make smarter decisions and improve bottom-line results. But for all this to work, CIOs need tools that can separate the signal from noise and dynamically provide meaningful insights about real-time performance.
Digital-visualization platforms provide a powerful way to do this more effectively and persuasively than previous generations of static charts or graphs. According to a new study from MIT, companies that have the most experience using digital dashboards and visualization tools not only make faster progress with digital transformation projects, but also generate more profit than companies that are less experienced.
MIT’s Center for Information Systems Research surveyed more than 1,300 large enterprise organizations, then correlated their responses with financial results from publicly traded companies within that survey group.
+8.4%
Difference in net profit margin, compared to industry average, of companies most experienced at using digital dashboards.
The findings suggest a clear link between an organization’s use of data dashboards and overall business performance. Organizations with advanced “dashboarding” capabilities better empower employees, generate more revenue from innovation projects, offer superior customer experience, and boast higher levels of overall revenue growth.
“Business leaders need a way to figure out whether the business is meeting its KPIs, or whether it’s time to pivot,” says Stephanie Woerner, a research scientist at MIT’s Sloan School of Management and co-author of the report. “If they don’t start thinking about how they capture, visualize, and measure value, they’ll miss the point of their transformation.”
Like other digital tools, an advanced dashboard alone doesn’t guarantee positive results. “Just because you put in better dashboards doesn’t mean your earnings will go up,” says Bill Franks, director of the Center for Statistics and Analytical Research at Kennesaw State University and author of Winning the Room, a book about effective data presentation.
Instead, he says, the effort that goes into creating an effective dashboard—agreeing on common metrics, integrating data from previously siloed sources, and using visualizations to tell a more compelling story—makes it more likely an organization will extract value from it. These create a virtuous feedback loop, enabling greater innovation and new revenue streams.
Deciding what goes into a dashboard also forces everyone to agree on what data is important, Woerner says. “Once you can get past arguing about which numbers to believe, you can look at what they’re telling you and ask, what should we do differently?”
Creating successful visualizations also requires consolidating and integrating data from multiple sources and democratizing access to the information, says Stuart Showers, senior vice president of business analytics for Transwestern, a U.S. commercial real estate firm.
Transwestern provides its clients with a data-visualization tool called Curve for managing portfolios of office space. For each building the client owns, the dashboard combines information about lease terms, workforce demographics, HR data, financials, and more.
Clients can drill down into the data to help tenants decide where they should expand or which offices might need to close during a downturn, says Anthony Katsivalis, the company’s national director of client technology. Transwestern also uses Curve to identify sales opportunities and predict which neighborhoods are primed for growth.
The privately held company won’t share specific numbers, but Showers says that using Curve has led to higher close ratios, longer retention, and a closer, more consultative relationship with its customers.
“By creating more data transparency we’re identifying more business sales opportunities for our brokers,” he says. “And that is incredibly valuable.”
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Dan Tynan, former editor-in-chief of Yahoo Tech, is a freelance writer whose work has appeared in more than 70 publications.