To knowhow to manage an SME using the dashboard,it is essential to have reliable software that generates it automatically.
- Being guided by a scorecard is something very obvious in certain professions, but there are still not a few managers of SMEs who do not use it and run their businesses almost blindly.
- Learn about the benefits of managing your SME using a dashboard.
Fernando Alonso ‘s Formula 1dashboard is his whole world when he’s on the race track.In his dashboard he has theindicatorsto win the race, although if his car is not up to his competitors, his results will be indicative that he needs to improve.
Powerwithout control is useless, said the slogan of the Pirelli tires that Fernando’s Formula 1 now rides. With these tires, according to the pilot, he hopes to achieve great success in 2022. The same thing happens in the business world, becauseif we run the business without control, the same our business will end up crashing.
Continuing with the simile of Formula 1, the driver’s communication with his team is another differential factor for success. If communication does not flow correctly in a company , the manager may enter the pits and find that there are no tires (merchandise), fuel (financing) or that his workers do not know what they have to do, nor the time they must spend. on the task (skilled and productive workforce).
Therefore, managing a company without a dashboard is like driving a Formula 1 without indicators such as tire wear or fuel level. We may crash, or get stuck due to lack of financial resources.
What is a dashboard?
Before knowinghow to manage an SME using the dashboard,you should know what exactly it is and what elements it is made up of. Just like you can’t play racing if you don’t know how to drive a vehicle.
A dashboard is amanagement control tool, which makes it easier for managers tocontrol the activityof their company. Thanks to the control panel, it is possible to monitor the follow-up of the objectives defined by the company , both at a general level and in the different areas, sections or units. To do this,indicators or KPIsare used to detect and act on deviations.
Before implementing a scorecard, it is essential to carry out a strategic reflection that helps us identify thekey points of our companythat we want to control. For example: payment and collection ratios, debt ratio, treasury ratio, etc.
Although these indicators can be calculated manually using a spreadsheet, ideally, our accounting program generates them automatically.
Indicators or KPIs of a dashboard
The following types of indicators are usually collected in a dashboard:
- Financial indicators. They reflect the main financial magnitudes.
- Customer control indicators. They are mainly used to measure the position of the company in the market in which it competes and to know the payment behavior of customers.
- Internal process indicators. They are indicators that measure productivity, quality, innovation, etc.
- Human resources indicators. People are the key to the success of organizations, so indicators must be created to analyze their behavior. Some examples would be: staff turnover ratio, absences, internal or external salary differences, etc.
Indicators should be neither too many nor too few, because if too many are created, efforts can be scattered, trying to meet too many objectives at the same time. But neither should they be few and fall short, since then management control will not be facilitated.
Benefits that the dashboard brings to your SME
The dashboard helps you manage your SME by providing, among others, the following benefits:
- It helps you measure the objectives of your company, both at a general and operational level.
- It forces you to reflect deeply on your business to define the indicators or KPIs to follow.
- Facilitates consensus regarding setting goals and how to achieve them.
- It facilitates internal communication, since it can be used as a communication tool to transfer the company’s plans to the different areas.
- It allows you to join efforts in a single direction, focusing managers and workers on achieving objectives.
- It helps you automatically detect deviations in the strategic or operational plan.
- It facilitates the discovery of the causes for which deviations occur.
Therefore, knowing how to manage an SME using the dashboard iskey to yourbusiness. But, so that you can focus on your company, Sage’s business management solutions integrate a dashboard with the main magnitudes to follow on its main page.
