Skip to main content
Home
The Online Resource for Modern FP&A Professionals
Please register to receive the latest FP&A news, updates and tips Login

Main menu

  • Home
  • FP&A Insights
    • FP&A Trends Digest
    • FP&A Trends Research
    • FP&A Trends Insight Paper
    • FP&A Trends Survey
    • Short Videos
    • Our Contributors
  • FP&A Events
    • International FP&A Board
    • FP&A Trends Webinars
    • Digital FP&A Circles
  • AI/ML Committee
    • Introduction
    • Members
    • Resources
    • Meetings
  • FP&A Tools
    • FP&A Trends Maturity Model
  • About Us
    • Company Policy
    • Privacy Policy
    • Editorial Guidelines
    • Our Ambassadors
    • Our Sponsors & Partners
    • Contact Us
image
Why Dashboards are a Powerful Tool in FP&A
July 8, 2021

By Olga Rudakova, Finance Professional and Data Skills Trainer

FP&A Tags
FP&A KPI
FP&A Dashboards
FP&A Technology
Data-Driven FP&A
FP&A Strategic Planning

fp&aIf you ask financial planning and analysis (FP&A) professionals about strategic management tools, they will eagerly name SWOT, PESTL, “what if” analysis, vision and mission statements, Porter's five forces… but hardly ever you would find a dashboard or dashboard design on the list.

This short article explains the strategic role of dashboard design and helps you set the right key performance indicators (KPIs) and benchmarks for your business.

What we measure we become: the importance of choosing the right KPIs

“Dashboards are for performance monitoring,” – one would argue. “What does it have to do with strategic management?”

Srinivas Venkatram, founder and CEO of an ideas-in-action lab, called one of his books: “What we measure, we become.” These wise words aptly describe the impact dashboards have on our business.

Have you heard of the cobra effect? The term was invented by the economist Horst Siebert. During British rule in India, the British government worried about the number of cobras in Delhi and offered a reward for every dead cobra. It was originally a successful strategy - a large number of snakes were killed for the reward. However, over time, inventive people began to breed cobras for the sake of earning money.

If you start paying glass makers for a kilogram of glass they produce, they will end up with a very thick glass (so thick that you can hardly see through it). If you pay them per square meter, they will produce very thin (and therefore fragile) glass.

The KPIs you choose to measure the performance of your business, the KPIs you use in traffic lights, and the gauges in your dashboards drive your teams' efforts and shape your business. Think twice before including anything in your dashboard.

There are several reasons why you should ditch the old FP&A reports

However, in my practice, Controlling and FP&A teams don't think twice about the structure of their reports. We are not in the habit of constantly reviewing and improving them. We just keep releasing the same reports every month, every week, every day.

Unfortunately, I hear quite often: “We'll start by copying our old reports into our new business intelligence tools” from companies undergoing digital transformation. Thus, they immediately reject all the benefits that technology has to offer.

High quality, complete real-time data readily available from various sources requires a paradigm shift. If we are to reap the fruits of the new technology, we must start thinking differently, and our management reports must look different.

The “oldest” part of our old reports are plans and budgets. We carry this legacy of the 1950s and 1970s into the twenty-first century. Management by Objectives (MBO) is obsolete. We started to challenge it in the 1990s when the Beyond Budgeting movement emerged. But just know, with the fast spread of business intelligence tools and a powerful push by the COVID-19 pandemic, we see a viable alternative available to virtually every business.

Rather than comparing your company's performance against a fixed target, say 5% sales growth, set a relative target of + 1% growth over the industry average or most important competitor. More objective performance metrics than plans and budgets are becoming available. Why stick with old ones?

At this point, we have established that not only the KPIs themselves but the benchmarks against which we compare them are strategically important. But we don't stop there.

Drilling down is not a panacea: look for the meaning behind numbers

I'm pretty sure each of you has heard a similar dialogue between company management and your fellow financial controller or financial business partner.

- Our sales are declining this month.
- Why?
- Because our fresh food sales are underperforming.
- And why is that?
- It is driven primarily by dairy products.
- Why is this happening?
- As butter and yoghurts are significantly down.
- Why???
- That I do not know…

It might be frustrating to hear “I do not know”, but are controllers really to blame? In most of the companies I've worked for, reports and dashboards are nothing more than systems of breakdowns and drill-downs. Financial analysts are very good at drilling down to the smallest detail, but do they really understand performance drivers?

One of the tremendous benefits of modern business intelligence technology and tools is the ability to integrate data from multiple sources. You can have operational and financial data from different internal systems and external sources in one report. Why don’t you?

Instead of just slicing sales data across all possible dimensions, you can collect in one place data on product availability, data on queue lengths, data on prices, data on advertising activity of competitors. With this at their disposal, your controllers will answer you not only with a description of the problem (which categories are declining) but also with a plausible explanation (50% discount on competitor's butter and delays in yoghurt delivery from a major supplier to our warehouse).

In summary

  • Take dashboard design seriously. Gain the skills you need or bring in experts.
  • Use a transition to Business Intelligence tools as an opportunity to reset your FP&A and Operational reporting completely.
  • Choose the KPIs carefully for your dashboards, they have more strategic value than it seems.
  • Choose objective relative benchmarks (e.g., industry averages) rather than fixed subjective benchmarks (e.g., budget).
  • Move towards integrated operational and financial reporting. Bring important operational drivers into financial reports.
  • Help your financial analysts go beyond your department’s KPIs to overall business understanding.

I believe that by following these steps, you will create dashboards that not only detect problems but also help fix them. A dashboard is not just a monitoring tool. Unless you make it one.

The full text is available for registered users. Please register to view the rest of the article.
  • Log In
  • or
  • Register

Related articles

Data Visualization
Top Three Mistakes in FP&A Data Visualisation to Stop Making Today
June 23, 2021

What is your data literacy level? Everybody agrees data visualisation is powerful. This article will guide...

Read more
fp&a
Maintaining the Relevance of FP&A in Changing Times
June 16, 2021

Irrespective of the industry you work in, I am sure all of you would have noticed...

Read more
storytelling
Balancing Analytical Depth with High-Level Storytelling
April 21, 2021

Now, more than ever, the FP&A profession stands to propel itself forward as the premier business...

Read more
narrative
Corporate Insight: The Monthly Narrative
April 1, 2021

Every month the Managing Director or Country Manager has to report the business results to the...

Read more
Improving Communication With Data Visualisations
June 18, 2019

Research shows that the human retina can transmit data to the brain about 60,000 times faster...

Read more
fp&a
Why FP&A Should Not Push Digitalisation Too Fast
March 25, 2021

As an FP&A leader in your organisation be a gentle guide and rigid challenger. Question decisions...

Read more
+

Subscribe to
FP&A Trends Digest

We will regularly update you on the latest trends and developments in FP&A. Take the opportunity to have articles written by finance thought leaders delivered directly to your inbox; watch compelling webinars; connect with like-minded professionals; and become a part of our global community.

Create new account

image

Event Calendar

Pagination

  • Previous
  • May 2025
  • Next
Su Mo Tu We Th Fr Sa
27
28
29
30
1
2
3
 
 
 
 
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Transforming FP&A Together: Human & AI Synergy
 
18
19
20
21
22
23
24
Moving from FP&A to Extended Planning and Analysis (xP&A)
 
Five Critical Roles for Building a World-Class FP&A Team
 
25
26
27
28
29
30
31
FP&A Business Partnering and AI: A New Era
 
All events for the year

Future Meetings

The Face-to-Face Amsterdam FP&A Board
The Face-to-Face Amsterdam FP&A Board Transforming FP&A Together: Human & AI Synergy

May 15, 2025

The Face-to-Face Milan FP&A Board
The Face-to-Face Milan FP&A Board Moving from FP&A to Extended Planning and Analysis (xP&A)

May 20, 2025

The Face-to-Face Frankfurt FP&A Board
The Face-to-Face Frankfurt FP&A Board Five Critical Roles for Building a World-Class FP&A Team

May 22, 2025

BPAI
The FP&A Trends Webinar FP&A Business Partnering and AI: A New Era

May 28, 2025

The Face-to-Face London FP&A Board: Data Management & Analytics: Unlocking FP&A Value
The Face-to-Face London FP&A Board Mastering Data in FP&A: Smarter Analytics, Better Decisions

June 5, 2025

FP&A Trends Webinar The Evolving Role of FP&A: From Number Cruncher to Strategic Advisor
The FP&A Trends Webinar Making FP&A Teams Fit for the Future

June 11, 2025

The Face-to-Face New York FP&A Board
The Face-to-Face New York FP&A Board From Insight to Impact: FP&A Business Partnering in Action

June 17, 2025

The Face-to-Face Sydney FP&A Board
The Face-to-Face Sydney FP&A Board Modern Financial Planning and Analysis (FP&A): Latest Trends and Developments

June 26, 2025

The Face-to-Face Singapore FP&A Board: Modern Financial Planning and Analysis (FP&A): Latest Trends and Developments
The Face-to-Face Singapore FP&A Board Modern Financial Planning and Analysis (FP&A): Latest Trends and Developments

July 8, 2025

AI/ML FP&A
AI/ML FP&A
Data and Analytics
Data & Analytics
FP&A Case Studies
FP&A Case Studies
FP&A Research
FP&A Research
General
General
Integrated FP&A
Integrated FP&A
People and Culture
People and Culture
Process
Process
Technology
Technology

Please register to receive the latest FP&A news, updates and tips.

info@fpa-trends.com​

              

Foot menu

  • FP&A Insights
  • FP&A Board
  • FP&A Videos

Footer countries

  • Amsterdam
  • Austin
  • Boston
  • Brisbane
  • Brussels
  • Chicago
  • Copenhagen
  • Dubai
  • Frankfurt
  • Geneva
  • Helsinki
  • Hong Kong
  • Houston
  • Kuala Lumpur
  • London Board
  • London (Circle)
  • Melbourne
  • Miami
  • Milan
  • Munich
  • New York
  • Paris
  • Perth
  • Riyadh
  • San Francisco
  • Seattle
  • Shanghai
  • Singapore
  • Stockholm
  • Sydney
  • Tokyo
  • Toronto
  • Washington D.C.
  • Zurich

Copyright © 2025 fpa-trends.com. All rights reserved.

0