In my last post I wrote a very brief summary on the development of Executive Dashboards and some of the basic elements that can be tabled for consideration within such a tool. As with everything company, there are a multitude of approaches as it relates to measuring the business, and defining the necessary approach regarding the reporting of financials. More specifically, there will be a completely difference approach for the reporting of a Retailer versus the reporting for a company that might have an intensive R&D effort. Both will have a completely separate, and unique, set of needs for their reporting.  For the sake of this summary, I will keep those needs aligned with that of an Apparel or Footwear manufacturer.

 

            With respect to our Company, there were 5 key areas that I chose to focus on. However, it should be noted that your approach to any level of EIS reporting should not be static and should be open to change to accommodate the reporting needs of the company. But in planning such a tool, the areas chosen should be at a high enough level that there will be only subtle changes for long-term reporting purposes. For our first generation of reporting, I chose the following areas:

a.      Orders / Revenues

b.      Operating Expenses

c.       Balance Sheet

d.      Finance / Working Capital metrics

e.      Dealer / E-Commerce metrics

 

            With respect to each of the sub-areas listed above, it’s important to note the need for brevity in each of these areas. As an example, in Section A above, the intent is not to do a data dump of every area that the company records revenue under.  In our situation, we record revenues at both the International, Domestic, and E-Commerce levels, along with further delineation by Footwear, Apparel, Clothing, Accessories, and Other. For the sake of an EIS platform, the best approach is to take the 80/20 approach where you can get a consistent snapshot of what is happening, if you will, the “temperature” of the Company. Should something be sub-par, it would be apparent within the EIS and there can then be a follow-up with more detailed reporting.  For myself, out of the 30 potential combinations above (Orders + Revenue), I chose to follow only 10. However, the 30 above would represent just the financial portion. The 10 I have included also include metrics on Pair performance. While only a fraction of the total permutations, it will give me an immediate indication if there are potentially greater issues to deal with respective to our corporate performance.

 

            What’s important to note is that this is not just a “Finance” document; it’s a document that needs to be shared among the Management team and used to prompt discussion or decision making. The data needs to be unquestioned and easily updated. It needs to be a document that other team members are eager to receive and provides them with the necessary “temperature”. Are you achieving that with your current dashboard reporting?

 

Thanks for reading . . . .

 

Jeffrey Ishmael