“Don’t trust any statistics that you haven’t falsified yourself.” Numbers can be used to steer any situation in the desired direction. They are ideal for manipulation – whether by omitting or overemphasizing certain information. However, transparency is essential in purchasing – so that strategic decisions can be made on this basis that prove successful in the long term and contribute to strong company results. Tools such as dashboards enable purchasers to present facts in a reliable and transparent manner, allowing them to better prepare for negotiations, develop target group-oriented, coherent reporting, draw up activity schedules, and convince their superiors and the executive board of the success of their work. In this article, we would like to give you some tips on how to create good dashboards.
Step by step to a professional dashboard
Dashboards are used in purchasing controlling and strategic purchasing, among other areas. They are tools for the graphical presentation of condensed figures – for example, they visualize key figures or make trends visible.
Above all, good dashboards need one thing: meaningfulness. They are often based on figures from different ERP systems. The challenge is, on the one hand, to interlink this information in such a way that a consistent picture of purchasing activities is clearly visible. On the other hand, the data must be prepared specifically for the target group so that the recipient – whether product group manager, purchasing manager, or executive board member – gets a quick and coherent overview. A dashboard is not just a graphic, but a composition of several elements, such as tables, alerts, and diagrams.
At a glance
If you want to develop really good dashboards, you should follow Stephen Few’s rules. According to these rules, graphics are used to provide a quick overview – enriched with external sources of information, they show comparisons – and tables provide more detailed information. All relevant information must be visible at a glance – AND a good dashboard is only as big as a screen page.
The most common mistakes
The same mistakes are made time and time again when designing dashboards. The classic mistake: graphics that look really good, immediately catch the viewer’s eye, but unfortunately have very little meaning. And even if there is a nice space available on the dashboard, eye candy is a no-no. Or: The dashboard is completely overloaded – too many elements with too much detailed information are just as useless as too few.
Table or graphic
Good dashboards provide transparency and do not manipulate. What graphic options are available? Tables, for example, are particularly suitable for giving the viewer a quick and detailed overview. No graphic can offer such precision. In addition, tables allow different values and different units of measurement to be used without any problems, whereas in a graphic this immediately leads to total confusion. Naomi B. Robbins sums it up as follows: “Graphs are for the forest and tables are for the trees. Graphs give you the big picture and show you the trends; tables give you the details.”
The diagram builder
Pie charts are popular, but they take up a lot of space to display relatively little information. It is difficult for viewers to identify small differences, and the information is only understandable when sizes are specified. Column and bar charts are good for displaying and comparing values.
Compared to column charts, bar charts offer the additional advantage of following the usual reading direction when labeling. However, both types of charts are hardly suitable for displaying trends. Line charts are a better choice for this purpose, as they visualize the progression over a specific period of time. Sparklines are mini-graphs without detailed scaling. Sparklines give the viewer an overview of the development of past values up to the starting value at a glance. Scatter plots end in point clouds – their use is only worthwhile in exceptional cases, as they are very difficult to understand. Bubble charts represent three values in one with points on an axis diagram. Two of the characteristics are plotted as in a scatter plot. The third value determines the size of the point or bubble. A bubble chart is only suitable for dashboards to a limited extent – for example, for quantities and price variance or a SWOT analysis – because the graphic becomes either too large or difficult to read when there are large deviations in the values on the X and Y axes. Speedometer charts are based on simple pie charts and use different colors to clearly illustrate statuses and evaluations, such as changes in material costs. This makes them particularly suitable for measuring target/actual comparisons for key figures. However, speedometers are more of a stylistic device – they require a lot of space and convey little information.
Traffic lights are another eye-catching feature. They draw attention to specific content in the dashboard – for example, when key figures fall into a critical range and immediate action is required in the event of deviations from planned/actual values. However, (red) traffic lights should be used with caution, otherwise the desired effect will quickly wear off.
Style guide
Dashboards must always be consistent and follow a clear concept – this is why a style guide is necessary, specifying functional and design layouts with information on the grids, colors, fonts, font sizes, and other formatting templates to be used. This makes it easier for everyone involved to create, read, and understand dashboards.
Back to the beginning
Three questions every dashboard professional should ask themselves before designing a dashboard: What is the purpose of the dashboard? What information needs to be conveyed? How should this information be presented so that it can be understood quickly and correctly?
Conclusion: Only good dashboards from now on
Dashboards are helpful tools and have the potential to be purchasing’s best friend. They provide a quick overview and direct attention to where it is needed. And recipients of reports appreciate it when information is presented transparently and in a way that is tailored to the target audience. Numbers are convincing – but only if they are trustworthy.
