File

Dashboard and reporting 37

Attention!During the exam, course-related questions may be asked (DCG 2008 and 2010) or a file may be dedicated.
in the creation of a dashboard.

1♦ THE TRADITIONAL MANAGEMENT DASHBOARD

A - Definition
It is a clear and concise document that brings together a set of significant and essential indicators.
in the short-term control of the management of the company or a responsibility center. The dashboards
are established within very short deadlines and with a high frequency (daily, weekly, men-
sleeve), which allows leaders to quickly analyze the evolution of indicators (presented in forms
of graphs, ratios, discrepancies, indicators, etc.), to quickly determine corrective actions and
even to anticipate the event. In this regard, the dashboard is a short-term management tool.

B - Integration
Each center of responsibility (see Sheet 19) has a dashboard, but these are interlinked with each other.
in the others following the hierarchical lines: it is the nesting principle. There is therefore vertical integration.
But the integration is also horizontal.
The dashboard of a manager provides information on elements that are outside of their direct responsibility but that
are necessary for a cross-sectional view of the company. Some indicators are shared among several
dashboards.
A fundamental point is to involve the stakeholders and obtain their acceptance of this tool so that it is not
perceived only as a control tool (and thus possible sanctions). The dashboard therefore allows
to communicate better, or even to demotivate the staff.
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C – Dashboard Functions
THE SCREENS OF DCG 11 - MANAGEMENT CONTROL

Through the points indicated above, the functions of the dashboard are "shaping up". It is therefore both a
control and comparison tool, a management and decision support tool, a diagnostic tool and
reactivity, a tool for dialogue, a tool for motivation and performance measurement.

D - Construction of dashboards
The key success factors are the essential conditions to be met in order to achieve the objectives. These factors
keys take the form:
either of distinctive competencies that give the company a competitive advantage;
either minimum performances to be achieved, the insufficiency of which would compromise the company's position in the face of
its competitors and could lead to its elimination.
Unindicateurest un élément significatif quipermet de traduire, de mesurer une action, une situation, un
process. These may include financial or physical indicators, result indicators and/or resources, of indic-
state or evolution indicators, global or partial indicators, quantitative and/or qualitative indicators, etc.
The target value is the value assigned to an indicator; it must be achieved over a specified period.
The classic approach to building a dashboard for a responsibility center is as follows:

General approach Example:supply center

1 – Define the objectives of the center The objectives are:
- to provide the necessary quantities of materials for production, while avoiding
➞ any shortage or, on the contrary, overstocking;
to know the quality of these materials;
to obtain the quantity and quality within the desired deadlines and at the minimum price.

2 - Retain the key points that Supply costs.

can translate these objectives Supply quality.
➞
Stocks.
Delivery times.
3 - Determine the key factors Mastery of procurement costs.
of success Quality level of supplies.
➞
– Control and management of inventory.
Respect for delivery deadlines.

4 - Choose indicators – Frequency of emergency procurement = Number of orders

pertinent in urgent / Total number of orders.
➞ Customer satisfaction rate = % of defective deliveries.
Average inventory turnover period.
Average supply time from the Manufacturing center.

5 - Specify, if possible, the value Target: urgent order.

target to achieve 0 defective delivery.
➞
- 20 days.
72 hours.
E - Dashboard design
Sheet37♦ Dashboard and reporting
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The commonly encountered general structure is as follows:

Indicateurs Valeur (N) Objectif Gap Value (N - 1)

The size of the dashboard should be limited to 1 page if it is daily, 1 to 3 pages if it is weekly,
2 to 10 pages if it is monthly.
The indicators are presented in the form of raw values, key variances between actual achievement and target, limited
aux facteurs clés de succès, deratios,declignotants(limites unilatérales ou bilatérales des indicateurs) qui
alerting on emergency situations.
The consultation of the dashboard should be facilitated by simple tables of figures and/or graphs.
which easily highlight the trends and discrepancies.
The dashboard is action-oriented. It also mentions the causes of certain discrepancies as well as the
corrective actions taken or recommended.

♦ Application (based on an exam topic)

The company AQUARUN, founded by Mr. Stinox, is engaged in manufacturing swimming pools and offering them for promotion.
individual house builders located in subdivisions.
The company's strategy is focused on a few key success factors specific to the product and the market.
Mr. Stinox designed, from the very beginning, models of pools in molded PVC reinforced by a frame, this
which guarantees these products a longer lifespan than the main competing models. The research
Competitive advantages are a necessity in this highly competitive market.
Commercially, AQUARUN also stands out from its competitors: the promoting client is contacted in
amount of the construction of the housing estate and enters into contracts before the completion of the individual houses.
AQUARUN then commits to specific delivery times.
More recently, AQUARUN has sought to diversify its activities, on one hand, by offering constructed pools.
according to other technologies to new types of clients and, on the other hand, by marketing a range of
products intended for pool maintenance. Mr. Stinox, eager to manage the performance of his business.
He plans to implement a follow-up for the sales service and the production unit. He wishes to introduce.
a dashboard management reserved for the sales function.
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218 THE DCG 11 FRAMEWORK - MANAGEMENT CONTROL

Develop a dashboard tailored to the commercial activity (pool sales) consisting of ten
indicators.

Objectives Key success factors Indicators

Number of specific requests / Total number
Customer offer personalization of construction sites

Compliance with the specifications Number of complaints per construction site

Satisfy the customer
Actual delay / Announced delay
Respect for the delivery time
Average number of days late
Quality of finishes Number of returns for after-sales service on site

Measurement of spontaneous awareness through survey

Develop the notoriety Recommendation rate = Number of deals

recommended by former clients / Number
total business
Number of salons conducted
Prospecting new clients
Number of prospects / Sales
Number of firm orders / Number
Increase the revenue of prospects
Business concretization
Number of firm orders / Number
of estimates completed

Competitive Position Market share

Amount of bonuses paid / Total compensation
Turnover rate
Sales motivation
Number of pools sold N / Number
of pools sold N-1
Commercial expenses / turnover

Ensure profitability Maintain profit margins Discount rate granted

Montant facturé / Montant des devis

F - The limitations of the traditional dashboard

The dashboard is often dependent on the years, resulting in a lack of responsiveness and possible errors.
in decision-making, etc.
It is not necessarily personalized by the center of responsibility.
It is often used solely for control and not to help steer the centers.
It is not necessarily designed in collaboration with the relevant stakeholders.
Finally, it is focused on essentially financial indicators.

G – An evolution: the balanced scorecard

In 1992, Kaplan and Norton started from the observation that financial indicators are not sufficient to evaluate.
the overall performance of a company (especially in an unstable environment).
 Sheet37♦ Dashboard and reporting

For these authors, 'each measure selected for the balanced scorecard must be an element of a chain of
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cause-and-effect relationship expressing the strategic orientation of the company. Therefore, it is no longer control that is
highlighted but the strategy and overall vision of the company.
This dashboard connects performance measurements along 4 axes, one financial and the other 3 to
operational or qualitative character (Clients, Internal Processes, and Organizational Learning): this must
allow the balance between financial and non-financial indicators, between short-term and medium-term objectives
In the long term, between indicators of past performance and forward-looking indicators.
(«prospective»), between the performance achieved internally and its external perception.
These links are outlined as follows:

Source: R.S. Kaplan and D.P. Norton, The Balanced Scorecard, Ed. d’Organisation, 1987.
The following table presents some examples of indicators by axis:
Axes Examples of indicators
% of investments dedicated to Research and Development and training.
Operational learning Employee retention rate.
Number of patents filed.
% of return from deliveries.
Internal processes Mean time to failure.
Average response time to a request.
Chiffre d’affaires moyen par client.%de chiffre d’affaires réalisé avec de nouveaux clients.
Clients
Market shares.
EBIT or Added Value.
Financial results Economic rate of return.
Rate of financial profitability.
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220 THE DCG 11 FRAMEWORKS – MANAGEMENT CONTROL

It should be noted, however, that according to the authors, 60% of organizations do not create any link between the budget and the strategy.
The balanced scorecard is therefore a tool that is difficult to implement.

2♦ LEREPORTING
Reporting consists, according to a previously defined frequency (often monthly), in reporting the information.
synthetic reports for managing a cost center, a factory, etc. to the decision-making bodies.
The information is essentially financial and homogeneous in order to aggregate the results of the different centers.
of responsibility or factories.
Example of cash reporting, based on a press review datalog:
Financial position: subsidiaries provide the headquarters with data concerning bank balances, loans,
the loans […].
Exchange position: subsidiaries provide headquarters with information regarding their exchange position by
devise [...]
Bank reporting: it is done annually rather than monthly like the previous two.
cadre de ce reporting, les filiales doivent indiquer le chiffre d’affaires réalisé avec chaque banque, les frais
financiers, and give a rating on the performance of each bank [...]