This document discusses how dashboards and scorecards can aid organizations in performance management and monitoring. It defines key performance indicators (KPIs) and explains that dashboards traditionally display real-time metrics to monitor parameters related to KPIs, while scorecards assess performance against pre-established KPIs and show trends over time. The document recommends using both dashboards and scorecards, with dashboards providing quick alerts and scorecards streamlining performance assessment against KPIs. Effective implementation involves defining KPIs, integrating visual tools into business intelligence systems, and customizing displays for different organizational levels while maintaining security.

1. No doubt you and your organization are sub-
ject to a set of key performance indicators (KPIs).
You may not call them such, but at any level of
maturity your organization probably has specific
business metrics on which to judge the health of
the business. They may not be refined, effective,
or completely visible, but they exist. These could
be based on financial goals, performance targets,
customer satisfaction considerations, and a
whole host of other metrics that are critical to
your organization. There should be different
KPIs at the company level than there are at the
department level. In fact, there may even be in-
dividual KPIs on which you are measured.
The purpose of this article is not to dictate
what KPIs are best for your organization. How-
ever, some guidance is provided for establishing
effective KPIs that permeate from top to bottom
throughout an organization in order to maxi-
mize the use of business intelligence (BI) tools.
Once you have your KPIs defined, how do
you know if you are on track in meeting these
metrics? Does everyone at every level in your or-
ganization know how their objectives contribute
to the success of the company? Do you know
how and to what degree you may not be meeting
these objectives? Additionally, do you know in
enough time to take corrective action before it is
too late—before the quarterly earnings report or
before your annual performance appraisal?
Enter dashboards, scorecards, and other vi-
sual tools. If used effectively, these visual tools
can add real value to your business. As said in my
previous two articles in this business intelligence
(BI) series,1
it is often not until your organiza-
tion has achieved this level of visualization that
the real value of your business intelligence infra-
structure (e.g., data warehouse and other foun-
dation systems) is realized. Too often, this level
of value is never realized due to cost overruns,
lack of easy-to-use tools, or other frustrations
with implementing BI foundations. Further-
more, implementation of dashboards and score-
cards does not need to involve significant addi-
tional costs, especially if you already have a solid
BI foundation and well-defined KPIs.
Whether you are using impressive data ware-
houses/data marts or are getting by with “spread
marts,” you probably already have too many re-
ports that you are wading through on a daily
basis. It takes valuable time to sift through globs
of tabular data and graphical presentations to de-
termine how you are doing against key business
metrics if, in fact, the reports even pertain to busi-
ness metrics (many do not). It is easy to get
caught up in the analysis and miss the big picture.
Dashboards and scorecards provide a rapid
and convenient way to quickly assess how you
are doing with the business metrics critical to
your place in the organization. You still can and
should rely on your tabular and graphical data
to back up the information portrayed in the
dashboards and scorecards.
If your organization is already making exten-
sive use of dashboards and scorecards, then you
may be well ahead of the game. That is, if these
tools are deployed effectively. This article will
highlight some of the methodologies that could
be used for effective implementation and provides
some guidance on what to look for when selecting
a dashboard or scorecard software application.
Management Science
Dashboards and Scorecards Aid in
Performance Management and
Monitoring
Bill Dagan
Bill Dagan is president of Energy Data Solu-
tions (endasol.com). He can be reached at
wjdagan@endasol.com.
SEPTEMBER 2007 NATURAL GAS & ELECTRICITY DOI 10.1002/gas / © 2007 Wiley Periodicals, Inc. 23

2. KPIS—A QUICK REFRESHER
Before addressing specifics of the dashboard
and scorecard visualization tools, it is important
to go over key characteristics of KPIs so that we
are all on the same page. What are key perform-
ance indicators? According to Wikipedia
(www.wikipedia.org),
Key Performance Indicators (KPIs) are fi-
nancial and non-financial metrics used to
quantify objectives to reflect strategic per-
formance of an organization. KPIs are used
in Business Intelligence to assess the present
state of the business and to prescribe a course
of action . . . KPIs are typically tied to an or-
ganization’s strategy (as exemplified through
techniques such as the Balanced Scorecard).
Other guidance used in defining KPIs is to
use the SMART (specific, measurable, achiev-
able, realistic, and timely) test. A complete set of
KPIs should include both financial and opera-
tional elements. Also, the most effective imple-
mentations have different, but related, KPIs at
the different levels of the organization.
For instance, a corporate KPI may be to in-
crease corporate profit from X percent to Y per-
cent this year. This broader KPI should then be
disseminated to other layers of the organization
with more specific metrics pertaining to that
particular business unit. For example, the cor-
porate profit goal may be translated to the gen-
eration business unit with a KPI of increasing
the profit margin on the generator fleet by X
percent. Furthermore, these lower-level targets,
if met, should be such to ensure that the corpo-
rate goal is met. This increase in generator profit
margin KPI in turn may be transmitted to plant
personnel with an established KPI to reduce
forced outages by so many days this year. This
KPI may then be relayed to the maintenance de-
partment to establish measurable metrics to en-
hance their preventative and predictive mainte-
nance programs and other metrics to reduce the
time to resolve critical work orders, and so on.
The methodologies used to define appropri-
ate key performance indicators at the various
levels of the organization that tie into overall
corporate goals are part of corporate perform-
ance management (CPM) programs. The tech-
niques to disseminate, monitor, and provide
feedback on how each level of the organization
is doing on their respective KPIs falls under per-
formance monitoring. Dashboards and score-
cards aid significantly in these processes.
DASHBOARDS AND SCORECARDS—
WHAT’S THE DIFFERENCE?
Dashboards and scorecards have been around
for quite some time. Their usage has expanded
with the increasing use of Web-based portals
and the availability of numerous software appli-
cations enabling more streamlined and system-
atic implementation of these visual tools. Al-
though many organizations and even software
vendors use the terms dashboards and scorecards
interchangeably, there is a traditional and im-
portant distinction.
What is the traditional difference between
dashboards and scorecards in the business intel-
ligence arena? Depending on who you ask, you
could get several different answers to this ques-
tion. Perhaps the distinction can be best charac-
terized by looking at the terms outside of the BI
context. If you ask anyone on the street what a
dashboard means, he or she will probably state
that it is a set of dials and gauges to measure spe-
cific parameters (speed, fuel level, engine tem-
perature) in real time.
A scorecard, on the other hand, can be re-
lated to a report card. A report card may show
that you got a B in chemistry. If your overall KPI
was to get an A in every subject, then this report
indicates that you are not quite performing to
your target in chemistry. Furthermore, this
measure also indicates the relative level that you
are failing to meet your goal. This presupposes
that you understand what a B means and what
you need to do to improve to an A. In this case,
you may rely on supporting data that show what
went into your B grade (e.g., average of 78 per-
cent on all written exams, 95 percent on all labs,
and 85 percent on attendance). This should en-
able you to take corrective action to bring you to
your “A” target (e.g., come to class more often,
and improve on written exams).
In essence, these analogies can be directly
applied to the BI world. A dashboard tradition-
ally contains various gauges, dials, and alerts to
indicate how you are doing on certain parame-
ters at specified periods in time—often real
time. A representation of a typical dashboard is
presented in Exhibit 1. The dashboard indica-
tors may pertain to specific KPIs, but the meas-
24 © 2007 Wiley Periodicals, Inc. / DOI 10.1002/gas NATURAL GAS & ELECTRICITY SEPTEMBER 2007

3. urement itself is usually not the KPI. For exam-
ple, if one of your organization’s KPIs is to re-
duce forced outages in your plant to a certain
target level, then you may have an alert on a
dashboard that tells you that there is high vi-
bration on one of your feedwater pumps. In it-
self, the vibration level of a pump is not the
KPI, but you can deduce that if this goes un-
corrected, then the pump may go out, forcing a
reduced operation or shutdown condition for
your plant. This directly affects your KPI of re-
ducing forced outages.
Thus, traditionally, dashboards provide
measures to help monitor important parame-
ters in a timely manner so that corrective action
can be taken. These parameters typically relate
to your KPIs. Therefore, dashboard portrayals
could encompass many measurements. Care
should be taken to include only the most criti-
cal indications, at least at the top level. Too
many gauges and too busy a Web page will
deemphasize the really important parameters.
You do not see indications of every fluid level or
every thing possible to monitor on your car’s
dashboard. You see the vital parameters. If an-
other group of parameters causes the “engine
trouble” light to come on, then you pull out the
manual to see the possible causes of this indica-
tion. Thus, only put key parameters on the first
page of your dashboard and use other pages to
drill down into some of the more obscure alerts
and measurements and to provide backup in-
formation for some of the alerts and gauges on
your first page.
Scorecards traditionally take more effort to
assemble and refine because scorecards typically
portray how well you are doing to a preestab-
lished set of KPIs. This requires that you have
well-defined, pertinent, and measurable KPIs.
It is also important that you have reliable and
consistent information in place to back up the
indications on your scorecard. For example, if
one of your particular KPIs is to increase the
profit margin on your generation fleet by a cer-
tain amount this year, then you need an under-
lying system that gathers all of the parameters
that go into the margin calculation and per-
forms the calculation. This goal means that you
must have a solid foundation (often a data
warehouse) for assembling all of the parameters
and algorithms on top of this system for the ac-
tual margin calculation.
Scorecards traditionally take more effort to as-
semble and refine.
You should also not get carried away with
trying to jam too many KPIs into your score-
card displays. Although the optimal number
depends on your organization, a rule of thumb
is that six to ten KPIs are sufficient in most
cases. Many of the scorecard applications em-
ploy structured methodologies like the Kaplan
and Norton (Balanced Scorecard), Total Qual-
ity Management, Six Sigma, or other ap-
proaches to help systematically develop effec-
tive KPIs that cover all vital areas of your
organization. An example of a traditional score-
card is shown in Exhibit 2. Not only do score-
cards have indication on how you are doing on
your metrics through green, yellow, and red col-
ors (and different shapes for the different colors
to enhance black-and-white printouts), but
they typically have trends showing you the di-
rection that you are heading.
SEPTEMBER 2007 NATURAL GAS & ELECTRICITY DOI 10.1002/gas / © 2007 Wiley Periodicals, Inc. 25
Exhibit 1. Example of a Section of a Typical Dashboard

4. DASHBOARD AND SCORECARD
IMPLEMENTATION
Which one should you use? You should use
both.
A dashboard will provide you with very quick
indications of where you are on important pa-
rameters so that you can promptly respond with
corrective action as needed. However, typically
dashboards will not tell you how you are doing
on your critical KPIs. Furthermore, traditional
dashboards will generally not alleviate the globs
of reports that you are still shifting though. The
more elaborate scorecards, on the other hand,
could and should streamline your operation and
allow you to quickly and easily assess where you
are on your KPIs and how these relate to the cor-
porate goals. The scorecard visual information
can then be backed by tabular and graphical data.
While scorecards typically require a more
elaborate foundation and are less time-critical,
dashboards can be assembled using real-time or
near-real-time feeds from frontline systems. It is
important to note that you do not need to bring
your entire data warehouse to real time just to
feed a dashboard indicator. That is, typical data
warehouse processes load data once a day. If real-
time data is needed to feed dashboard indica-
tions, then you should consider feeding the
dashboard directly from the frontline system in-
stead of trying to upgrade the data warehouse to
be a real-time system for this data. In some cases,
it may be important to have near-real-time data
within the data warehouse, but the cost/benefit
should always be a consideration when making
these decisions.
It is also important not to necessarily wait
until everything is in an underlying system prior
to making use of dashboards and scorecard
methodology. For instance, in the generation
margin KPI example, all of the parameters were
captured in the data warehouse except for the
variable operations and maintenance cost for
certain plants. This part could be a manual
input or estimation and should not delay dis-
playing this important KPI on your scorecard.
However, the application of these tools for
your organization may blur any traditional dis-
tinction between dashboards and scorecards. This
merging of technology is fine if the resulting ap-
plication ends up being the most effective ap-
proach to performance management and moni-
toring for your organization.There is no hard rule
that says your scorecard cannot be fed by more
timely data, approaching real time—especially if
26 © 2007 Wiley Periodicals, Inc. / DOI 10.1002/gas NATURAL GAS & ELECTRICITY SEPTEMBER 2007
Exhibit 2. Example of a Typical Scorecard

5. this allows your organization to more rapidly react
to deficiencies in meeting some of the KPIs.
It is also quite appropriate and sometimes
most effective to enhance dashboard or score-
card displays with some key charts, graphs, or
even tabular data. However, it is important not
to have the entry screen be too busy because this
will take away from those metrics that are im-
portant to monitor. An effective alternative is to
enable drill down into supporting information.
For example, if you see a KPI that is red or yel-
low, then a click of the mouse should allow you
to drill down into supporting information to
pinpoint some of the underlying causes. Drill
down could be tailored to several layers with
each layer providing even more details. This
could be accomplished through linked reports
and/or with the use of online analytical process-
ing (OLAP) cubes.2
However you implement the dashboard and
scorecard methodologies, it is important that
these visual tools be readily available to everyone
as appropriate, preferably via the company Web
portal. Most portal technologies allow you to
customize the pages for each organization and
individual so that you see the information most
pertinent to your function and your preference.
Most dashboard and scorecard software ap-
plications also allow for a great deal of cus-
tomization and include a variety of features. One
popular feature is the use of cascading scorecards,
which easily link KPIs at all levels of the organi-
zation from corporate down to your specific
business unit and even your individual KPIs.
This allows you to readily see how performance
on your KPIs relates to the corporate goals. Of
course, it is not always appropriate to allow
everyone to see how others are doing on meeting
their KPIs, especially if your company has cer-
tain regulatory divisions that prohibit some busi-
ness units from seeing the details of other busi-
ness units. Many software packages have such
security to limit permissions as appropriate.
Care should be taken when selecting a soft-
ware application to implement dashboards and
scorecards. There are numerous software pack-
ages on the market today. The best applications
will encompass both dashboard and scorecard
technology and have a variety of visual aids that
allow you to create those most attractive to your
organization. The best applications also provide
systematic approaches for implementation.
These applications should have streamlined data
connectivity and enhanced drill-down capabil-
ity through linked reports, OLAP, or other
methodologies. The package must integrate eas-
ily to your existing infrastructure—you do not
want to spend the time and money developing
custom interfaces because the software package
you purchased does not conform to the integra-
tion standards in place at your company.
Finally, implementing dashboards and score-
cards does not have to be an expensive endeavor.
If you already have a sound BI infrastructure,
such as a data warehouse or other foundation,
and your company has refined KPIs, then adding
these visual aids can be done for tens of thou-
sands of dollars (including licensing fees) over a
period of weeks. On the other hand, if the infra-
structure is not in place, you do not have a con-
cise set of clearly defined and measurable met-
rics, you try to tackle too much, and/or buy an
overly complicated and expensive software pack-
age, then implementation could take hundreds
of thousands of dollars over an extended period.
As mentioned in the previous articles in this
BI series, if your organization is plagued with
data-quality issues,3 then no tool no matter how
fancy will come to your rescue. You cannot fix a
faulty infrastructure with a state-of-the-art pres-
entation tool. Thus, before embarking on this
next step, make sure you consider where you are
regarding your data management infrastructure
and look for the software package that best fits
your situation. That said, you also do not need
to wait until every thing is perfect prior to tak-
ing advantage of dashboard and scorecard tech-
nology. Some manual provisions or “not opti-
mal” data integrations may be needed as
placeholders in order to provide the most value
to your organization in the shortest practical
amount of time. These placeholders can then be
systematically replaced to meet your overall cor-
porate standards.
NOTES
1. (2007, May). Business intelligence simply stated, Natural
Gas & Electricity, pp. 24–27; (2007, July). Why has “data
warehouse” become a dirty word? Natural Gas & Electricity,
pp. 18–22.
2. For an explanation, see Dagan, B. (2007, July). Why has
“data warehouse” become a dirty word? Natural Gas & Elec-
tricity, p. 18.
3. For example, see Dagan, B. (2007, May). Business intelli-
gence simply stated, Natural Gas & Electricity, p. 24.
SEPTEMBER 2007 NATURAL GAS & ELECTRICITY DOI 10.1002/gas / © 2007 Wiley Periodicals, Inc. 27