Whether you are focused on building your strategy, developing a Balanced Scorecard, aggregating data, or turning data sets into a digestible format, you are very likely looking for some kind of software to help. There are a number of great options on the market, and each of them have varying benefits and things to consider.
Specifically, we’ve had many inquiries from organizations that are managing their measures in a variety of ways and thinking about data visualization software. Sometimes, after taking inventory of these organizations’ wants and needs, we realize that they’re actually looking for report generation software—but they can’t make this call until they fully understand all the available options.
To that end, we’ve created this guide. First we have a “cheat sheet” of the four most common types of KPI software options, and a more detailed look at a few reasons you may be focused on data visualization software. We’ll wrap up by describing eight things to keep in mind during the software selection process.
Note: Keep in mind that many popular software options on the market today aren’t strictly in just one of these four categories. You’ll often see a hybrid of these options. So first be aware of exactly what your organization needs, and then do your homework. (If you still aren’t sure what features you need in a tool, this free checklist should help you narrow it down!)
4 Types Of KPI Monitoring Software
1. Strategic Planning Software
Strategic planning software allows you to develop and execute your strategy within an organization. A lot of the functionality with this type of software revolves around creating an organizational-level strategy and implementing it across your departments and divisions. For example, if one of your objectives is to improve cross-selling of your products, you could have organizational-level objectives trickle down into your various departments. Strategic planning software helps you ensure that each division is held accountable for their portion of that objective or measure and allows you to evaluate how they’re each contributing.
The type of company looking for strategic planning software is either just getting started with strategic planning or has a small strategic planning department. They’ll very likely want to use the software to create or mend their current strategy, which is beneficial in the early stages. If you already have a solid strategy in place or are looking for a lot of flexibility in customizing your strategy, strategic planning software may not fit the bill.
2. Balanced Scorecard Software
The Balanced Scorecard (BSC) is a strategic framework based on the Norton and Kaplan methodology. With BSC software, all the various components of your strategy can be organized in a way that allows you to see what your goals are, whether you’re achieving those goals, and what projects you have in place to meet those goals in the future. It is a very popular framework, as it allows organizations to see a high-level view of their progress.
BSC software is ideal for organizations that already have a Balanced Scorecard concept in place in their organization or are in the process of creating one. Organizations that have a scorecard in place tend to be proponents of strategy mapping, which allows you to see a one-page visual of your high-level qualitative goals. One of the downfalls of the BSC is that it is fairly regimented in its structure, which makes it less flexible than some frameworks.
3. Report Generation Software
Report generation software is as it sounds—it allows you to easily aggregate your data and create reports. It handles what a lot of people use Microsoft Word and PowerPoint for, but it is easier and quicker. Using report generation software, you can create reports with just a few clicks and export them to a number of different formats.
In terms of efficiency, report generation software can most certainly expedite your current process. Customization is another benefit; you can typically make your reports match your current branding and mirror the look and feel you’re going for. The negative is that strict report generation focuses more on performance measurement than performance management.
Performance measurement focuses on how you did—but performance management takes it a step further and focuses on what you can do about it over the next reporting period. So you may want to consider a solution that takes both into account.
4. Data Visualization & Dashboard Software
Data visualization software (also known as dashboard software) allows you to take massive data sets and configure them in a way that is simple, digestible, and engaging. It is visually appealing and modern, as it allows for the creation of data visuals and charting that is far more advanced than your basic bar chart. One popular option—Tableau—could create geographic heat maps, if you wanted to see, for example, which states in the U.S. are using the most water on their lawns.
If you want to see what a particular demographic of your customers bought on Saturday of last week, data visualization software could provide you with great results. But if you’re more interested in seeing trends or qualitative takeaways, report generation or Balanced Scorecard software is probably more up your alley.
There are a few reasons you may be focused on KPI management and thinking about data visualization software. Keep your mind open as you may be just tracking a bunch of measures in a strategic way and need another software described above.
1. You need a common way to talk about the same measure.
Have you noticed that someone in your sales department describes your revenue different than someone in your marketing department? And your finance department doesn’t use either of their definitions? If you don’t have a commonly accepted definition of your measures, a dashboard might be a great tool to integrate within your organization. Even the practice of simply creating a dashboard using data visualization software will be helpful in getting your team on the same page, using the same common definition.
2. You need to see your data in real time (or the same time period).
Let’s say you want to examine recent sales and mention it in a meeting. One person might start looking at your total sales from 2016, while another is looking at year-to-date sales in 2017, while someone else is only examining the sales from that month. Those individuals are probably looking at extremely different figures! It won’t be possible to have a productive conversation about sales if you’re not all on the same page.
A dashboard gives you and your team the ability to see information in its most up-to-date form so you can look at benchmarks and data from the same time periods and address appropriate elements.
3. You need to focus your organization on a small set of key priorities.
Think for a moment about the following situation: You run a manufacturing facility, and you want to focus on your error and defect rates. Everyone understands the definition of an error rate, but isn’t sure what measure to focus on to determine whether you’re being successful with this particular priority. Should you examine the cost of the defects? How long has it been since a widget was created with a defect? What about the number of widgets with a defect in the last week? Or should you simply determine the overall profit of the line during the course of the week?
When you’re equipped with a reporting application tailor-made for the needs of your company, you can create great reports with incredible ease.
As you can tell, this analysis exercise could get confusing quickly. Dashboard software helps you select the measures you’ll use to assess your key priorities and ensure that everyone in the organization understands how those are measured.
4. You’re determined to focus on teamwork.
Dashboard software can help get everyone in your company on the same page, working toward a common goal. If you work at an airline, a common goal might revolve around plane turnaround time. To ensure the success of this goal, pilots may help do safety inspections, and flight attendants might do some cleanup on the plane so you can speed the deplane and reloading process and ensure that flights depart on time.
In a factory setting, your team might be focused on the number of days since the last safety incident. A safety focus necessitates not cutting corners, looking out for fellow employees, cleaning up areas that aren’t necessarily in your area of responsibility, and more. In essence, a dashboard can encourage team solidarity and discourage apathy or selfishness.
5. You want to create healthy competition across multiple locations.
If you have multiple locations, a dashboard may help you create healthy competition across your organizations. Consider the strategy used by Hilton Hotels. This massive hotel chain uses a common dashboard that measures whether the hotel is operating ideally, which is displayed on the wall behind the check-in desk. At the end of the year, the chain gives an award to the hotel with the highest dashboard ratings. This program has done an excellent job at creating friendly competition within the brand.
Before you move forward with your dashboard, a word of caution: Without the right measures, you could be driving your organization to a precarious situation.
If you’re concerned that your measures aren’t right, you may want to consider creating a scorecard. A scorecard has more of a strategic link to your goals and can be beneficial in revising or sharpening processes or strategies. (This article that compares dashboards and scorecards has more information.)
At this point, you may have a good idea of the kind of KPI software you need.
- If you’re just getting started with your strategic plan or want to mend your current strategy, you may need strategic planning software.
- If you have a Balanced Scorecard in place—or are in the process of creating one—you’ll likely want Balanced Scorecard software.
- If you need to easily or quickly aggregate your data and create reports with a few clicks, you’ll be looking for report generation software.
- If you need to take very large data sets and configure them in simple, digestible, and engaging ways, your best shot is data visualization software.
Whichever of these software options you choose, it’s important to plan the software selection process carefully and meticulously. Below are eight things you should keep in mind during this process.
The Software Selection Process: 8 Things To Keep In Mind
1. Determine why you need software.
First, you need to determine who will actually be interacting with the software regularly, as the person responsible for software selection may not be the end user. Be sure to talk to these individuals and detail what they are looking for in data visualization software and the context behind those needs.
2. Figure out the end-user requirements.
Once you’ve determined who is going to be using the data visualization tool, begin surveying the individuals to create two lists: “must-haves” and “nice-to-haves.” Ask those who will be using the software what problems they’d like to solve and how they think data visualization software will play a key role.
3. Determine your budget and project timeline.
Based on your requirements, does this seem more like an 18-month project with a $500,000 budget or a one-month project with a $10,000 budget? There’s a huge difference between the two—and these things should be determined before you begin shopping for software.
There are tons of things that can affect pricing, including the hardware, number of user licenses, upgrades, maintenance, training, integrations, modifications, conversions, implementation services, and more. (Your list of must-haves and nice-to-haves will come in handy once you start shopping in the next step.)
4. Conduct RFP or research as you are required.
You’ve now figured out who will be using the software, what they need, how much you can spend, and how quickly the project should be completed. Now it’s time to research your options!
We suggest narrowing down your search to organizations that fit your budget and have (or have nearly all of) your must-haves. All data visualization software companies are different; some will post pricing directly online (or send it to you via email after an inquiry).
If you are a public sector organization—say, a municipality—you may have to write a request for proposal (RFP). You can read all about that in this article. Once you have the capabilities and prices of some vendors, you can whittle down the list.
5. Make a short list of possibilities.
You won’t want to waste your time parsing through a huge list—and you won’t want to waste a software company’s time either—so we suggest only presenting upper management with two or three favorite data visualization options. If you have done your search right, you will be excited about a few possibilities (and hopeful that they surprise and delight you in the next step).
6. Provide some of your information and ask for a mock-up.
You’ve likely seen some examples of what the software can do to data in general—but it’s important to see what it can do with a sample of your data. Some organizations may simply collect that information and send you a mock-up, while others will walk you through a live guided demo. Others still may provide you with a free trial period of their software and allow you to use it for a limited time. This article describes how to use that time wisely and to your advantage!
7. Be sure their support team fits culturally with your organization.
This is easily (and frequently) overlooked, but it is important when you’re considering your options. Do you mesh well with the individuals who will be providing you with technical support? If the product is top-notch but the customer service is despicable, you’re going to want to go with another option. Choose a software company (and support team) that seems to care about your organization’s challenges as much as you do.
8. Select the software that best fits your needs within the budget you have.
With all the information you’ve now collected, you should be able to make an informed decision about a software that fits your budget and meets your requirements.
Stuck between two options? Check out the online reviews! Between Capterra and good ol’ Google, you should be able to track down a number of satisfied (or unsatisfied) customers.
Before moving forward, consider these cautions.
First, don’t become enamored with features you don’t need. If a software company doesn’t meet your must-have list and tries to sell you on a number of other features, it’s best to walk away. Companies often do a great job selling these features—but it’s important to stick to your guns.
Additionally, make sure you do have a plan for maintaining the software. Once you have the software, will there be a lot of maintenance required? Does an IT person from your team or their team need to be involved, or is the interface simple enough for anyone to take care of it? Additionally, can you afford the software maintenance?
So long as you select your software wisely and heed these cautions, you’ll end up with a piece of software your organization loves and benefits from.
Still deciding on the best tool for your company?
This ebook will help get you started by explaining in more depth the advantages and disadvantages of each option so you can determine what’s best for your unique situation. Download it today.