The selection and the definition of indicators is, in our experience the most costly process in the implementation of a Digital Insight Management system. Without an effective and well-established methodology, it is not easy to determine which data deserves a high level of attention and which should be discarded, or at least relegated to a lower level of importance.
To produce a strong collection of key indicators for your business, it is vital to conduct a series of initial tasks including the definition of objectives and the definition of stakeholders. These tasks are reviewed below:
Definition of objectives
A scorecard or dashboard can simply never represent of the information available. Following the definition of a KPI from the book The Balanced Scorecard: Translating Strategy into Action (Harvard Business School Press):
BSC (Balanced Scorecard) is a revolutionary tool to mobilize people to fulfill the company´s mission through channeling energy, abilities and specific knowledge held by people throughtout the organization towards the achievement of long-term strategic goals
It is clear that the second part of the definition is highly important: The scorecard should be oriented towards the achievement of strategic goals. Therefore the first step towards the definition of indicators should be the definition of said goals or general objectives.
Although it seems redundant in some circumstances, it is always advisable to ask ourselves if each of the KPIs selected is critical for some of the general objectives proposed. This serves, to get rid of the KPIs which are not associated with any defined objectives and are therefore irrelevant.
Let´s consider an example: our objective is to increase “engagement” of the users with our online asset.
The metric “page views” alone does not provide any valuable information: we do not know if these “page views” correspond with the same users and therefore cannot determine whether the activity of these users within the site has increased or not. The metric “visits” has a similar shortfall: it will not tell us if an increase in visits actually corresponds with increased engagement or whether it is simply a response to a strong marketing campaign or other external factor. While these two metrics alone do not provide us with value in evaluating our general objectives, the combination of both offers us valuable information. The ratio of “page views/visits” is a direct indicator of the activity of the users of our digital resources and gives us a direct vision of “engagement” of the users with our assets, which can be supplemented with other related indicators.
Definition of Stakeholders
The definition of stakeholders or information recipients, is a decisive step for the implementation of a system of Digital
Insight Management. Each Individual, depending on their position in the company, their role and responsibilities will need specific information made available to them for the making of particular decisions. Dashboards should be unique and respond to the necessities of each individual, offering each with a comprehensive vision directed towards their responsibilities, and always provide the most specific information possible.
Establishing heirarchical relationships between the different stakeholders can help us to have a clear vision of the information needed in each case; in addition to providing a structured vision of the solution, and acting as a first step for the tailoring of workflows for decision making- a key aspect of the methodology for the optimization of digital assets.
With this information compiled, the selection of indicators practically becomes an automatic process. Any successful Digital Insight Management Solution will of course retain margin for improvisation, however, in the case of specific requirements or exceptional situations. Throughout this process, the figure of the online analyst plays a vital role in uniting specific requirements of both: each of the report recipients and the technical aspects which feed the system with information for different scorecards.
Not Another Dashboard.