Please don’t fall into the trap of adding lots of KPIs to your company and department level dashboards. It can cause confusion. It’s for this reason we will always challenge area owners who insist on having 20+ KPIs in their main dashboard. Once we’re past 20 different metrics, we don’t think that the “key” part of KPI applies.
Now let me be clear, if you’re performing a more detailed piece of analysis, it can be useful to look at different measures to get the full picture. But in my opinion every single metric is not needed in the regular reporting of that area. The additional KPIs can very easily create analysis paralysis. There’s just too much going on in the report for it to be useful and drive decisions.
How many is too many?
I can hear you all asking, so how many metrics is too many? I will state here that every situation is different. But once you have 3 different metrics that are measuring the same goal you probably have too many. At Data Companion we try to maximise the information we show with as few metrics as possible.
A method we use to select the right KPIs is to understand the question a dashboard is trying to answer. If the metric doesn’t help in answering that business question it should not be in the dashboard.
We will also try to use simple metric definitions, so they can be easily understood. That way everyone in the business can understand the metrics and know if they need to take action.
For instance, for online businesses with a website we really like to have a successful sessions metric. They would choose the conversions and events that they would count as a successful session. These could include purchasing something, creating a customer account, making a transaction etc. What’s great about this is this metric can be drilled down into the individual events. Or drilled up if the company has other products like an app or browser extension.
Please if there’s one thing you do today, take a critical look at your dashboards and ask the question do I really need all those metrics?
