The advent of business intelligence has resulted in an increase in demand for analytical tools. Businesses are no longer content with traditional performance reports. Rather, more elaborative, and self-explanatory analytical tools are required which can effectively extract accountability from strategy and monitor the progress. Dashboards and Scorecards are two such analytical tools that provide you with a customized view of your success metrics and explore the given information to make strategic business decisions.
However, despite their common objective of providing an automated approach to ensure the smooth and efficient running of your business; dashboard and scorecards do come along with subtle yet imperative differences between them.
You might need a dashboard to monitor your company performance and manage operations, while a scorecard would be a better option to manage your company performance and the strategies. However, things are not binary. Businesses thrive on managing both operations and strategies to achieve desired goals. Depending on your business needs and time frame of monitoring, you might lean towards a dashboard or a scorecard, or even an overlapping solution with both these tools.
This article provides its readers with a general overview of a dashboard and scorecard, their underlying differences, and situations where both these tools need to be used along with each other.
What is a Dashboard?
A dashboard is a user-friendly visualized representation of datasets. The information can be demonstrated in form of a chart, image, video, or text. A dashboard can also be a collection of multiple reports put together on a single platform for the viewer to perceive desired information. The various graphics and visual representations in a dashboard provide the user with a real-time updates on the current business scenario. It can be perceived as a tool which synchronizes with event capturing systems and provides frequent alerts and notifications in case of any observed anomalies in performance metrics.
Figure given below is a perfect example of a BIRD dashboard showing different metrics affecting the sales department in a company
Consider a business dashboard as an analogy of a car dashboard. Your car dashboard consists of various meters and gauges to keep you updated with vital information such as current speed, fuel level, and engine temperature. A red line on the gauge would indicate an alarming situation. It is up to the user (car driver in this case) to evaluate given information and improve his or her driving.
In a similar aspect, a dashboard provides its viewers with real time status and trends of their business activities. It provides you with metrics to monitor company performance but does not tells whether the metrics indicate a positive or negative impact on your business. That is left to the user to interpret from given information and take decisions accordingly.
What is a Scorecard?
A scorecard is a visual representation of current metrics against a set target or goal. It utilizes key performance indicators to evaluate success or failures of your efforts in achieving the desired goal. A scorecard provides companies with required platform to execute business strategy by mapping performance with projected targets. It is a performance management tool which helps you to take relevant decisions to bridge the gap between actual performance and desired goal.
Compare a business scorecard with a high school report card. Remember, your school report card would contain marks or metrics defining your performance for a period (week, month, quarter, or year). Actual marks for each subject are displayed against a specific target.
On a similar note, a scorecard in business environment measures business activities by comparing actual metrics with desired targets and helps user gauge the performance with respect to expected results.
What are the differences between a scorecard and a dashboard?
From the above given definitions, while a dashboard is a tool with visual representation of relevant business data, a scorecard is a tool displaying business metrics against the backdrop of predefined targets. Fun part is, you can implement a scorecard by displaying the key metrics in a visualized manner, in format of a dashboard. However, a scorecard can also be a simple spreadsheet or tabular format.
3 Areas of Difference between Dashboard and Scorecard
Given below info graphic shows 3 key areas which outline the differences between a dashboard and a scorecard:
Scorecard or Dashboard? What do Statistics Say?
Companies these days are shifting from mere financial figures to balanced scorecards in analyzing the performance of each aspect such as employees, clients, systems, processes, etc. While 80 percent of companies attributed the improvement in operating performance to the use of balanced scorecards, 66% gave credit to balanced scorecards for an increase in profit.
Like a scorecard, a dashboard is also vital for performance management with about 60% of companies using dashboards for defining and delivering KPIs. However, unlike a scorecard, a dashboard provides a context for the visualization.
Figure shows the result of a survey on various aspects of implementing a dashboard in a company:
5 Scenarios where dashboard can be used:
While the main purpose of a dashboard is to show visualizations depicting the performance of internal divisions, teams, or the company, it can be used in the following scenarios as well.
3 Scenarios where scorecard can be used:
A scorecard displays metrics which indicate progress of teams, divisions, or entire organization. Given below are 3 scenarios where a scorecard is used in a company or organization.
Blurring the Difference between a Dashboard and Scorecard…
Despite the above given contrasting view of the dashboard and scorecard, it would be wrong to say that dashboards and scorecards are not mutually exclusive. Companies actually use both of these tools in tandem with each other. As stated in my previous article, a good dashboard design should implement context to provide its purpose. Conversely, a good scorecard would provide actionable information to guide its users in taking the right decision.
The above-given article provides a generalized overview of a dashboard and a scorecard and subtle nuances between these analytical tools. Any additional information is welcome to be added in the below-given comment section.
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