Measuring ROI from a dashboard deployment can be challenging because a lot of ROI is what we would deem as “soft” ROI. Also, much of the value of dashboards comes from things like time savings, better access to data and better visibility into information which are hard things to measure quantitatively.
I recently had a discussion with one of our customers and I thought this was a great example of possible ROI. They are a large company that has a tremendous amount of inventory in their warehouses. One of the goals they set for the year was to reduce their inventory on hand in their warehouse by 3%. Reducing the inventory in their warehouses each year would equate to tens of millions of dollars in cost savings.
So, they spent many hours with high priced executives to come up with this goal and stood to gain a lot if achieved. Now, how could they push this down to the people that would actually be the ones to achieve it? Voila, a dashboard! Previously when they tried to set goals and measure performance or actual, they had to use reports from their warehouse inventory management system. This was usually in the form of reports with a lot of text that was hard to read and information that was generally out dated.
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The solution was a dashboard that could present the target and actual data in a simple visual format to the users in near real-time. By doing so, they accomplished two goals. One, they gave better, more timely visibility in an easily digestible and understandable format to the workers in charge of the inventory. Secondly, they gave access to the supervisors and senior managers that were responsible for reaching the goal giving them visibility and driving accountability. You can’t manage what you don’t measure.
The end result was an inventory reduction of 6%, doubling their original goal and saving them a ton more. Was this the dashboard that did this? No, it was the tool that enabled them to track, monitor, and be accountable to the goal. So what is the ROI for the dashboard piece? In this case the customer could care less.
Dave Ferguson, iDashboards