5 Tips for Creating an Effective KPI Dashboard for Your SaaS Business

KPI dashboards are all the rage right now. New dashboard products are popping up left and right. Want to get in on the hype, but not sure where to begin?  Keep reading below to learn 5 keys for creating an effective KPI dashboard for your SaaS business.

1. Select the right KPIs

A KPI dashboard is only as powerful as the KPIs included in it. But how you know which KPIs to include? To figure this out, let’s step back and define what exactly is a KPI:

A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving a key business objective.

Based on this definition, you first must articulate your company’s strategic business objectives. Then, you must decide on the KPIs you want to use to measure performance against these objectives. The KPI should answer the question “are we meeting our strategic business objective?” and should be measurable over time.  

Now that you have your KPIs, we recommend identifying and tracking a few supporting metrics for your KPIs as well. Just because all metrics aren’t important enough to become your KPIs doesn’t mean they still aren’t valuable to track. Metrics can often help explain part of the story when analyzing your KPIs.

So, what could this look like in practice for your SaaS business?

Strategic business objective : grow annual recurring revenue (ARR) through higher customer retention

KPIs : ARR and net revenue churn

Relevant supporting metrics : churned, expansion and contraction recurring revenue by business segment / product

2. Identify your data needs

Ok great, you’ve defined which KPIs and metrics your business will track, now you need to figure out how. Many of our customers struggle with this step if they have never built out a KPI dashboard before. You need to fully understand your business’s data landscape - what data is stored where, how the data is stored, how often it’s updated, and how easily you can pull down the data for analysis.

Good news, you can actually calculate most of the SaaS industry standard KPIs and metrics with just your business’s finance data and bookings data. Below are the typical data requirements for calculating SaaS KPIs.

Financial Data

Data Source : accounting software

Data Needs : Functional P&L, Balance Sheet and Cashflow Statement by month

Bookings Data

Data Source : CRM platform and/or customer billing system

Data Needs : Dollar value of subscription license for given period by customer, seat based data including # of seats and price per seat per customer, customer segmentation data (product, industry, country, etc.)

Once you have your data sources defined, make sure you can pull the data down in a simple repeatable format.

3. Cleanse, aggregate, validate and repeat.

You know what data you need and where it’s coming from - next you need to make sure your data is accurate. We all have heard the adage “garbage in, garbage out” and it could not hold more true when it comes to creating your KPI dashboard.  If you can’t rely on the data you are feeding into your dashboard, then you won’t be able to trust the KPIs it is generating. Basing business decisions on inaccurate KPIs can lead to catastrophic results.

When working with our customers, we spend a large portion of the implementation time on cleansing, aggregating and validating all the data fields needed for the KPIs. It is not uncommon for this to be the most time consumption step in building your KPI dashboard and this step should not be taken lightly.  Some of the most common data issues we see are:

  • No single source of truth between your disparate systems

  • Incorrect revenue recognition practices

  • Out-of-date or inconsistent customer and contract data

Again, it is important that your data can be cleansed, aggregated and validated in a repeatable process so you can easily refresh your dashboard each time.

4. Establish Ownership and Share

Success! You have created your KPI dashboard - now what? A commonly overlooked element around dashboards is around how it will be updated and utilized in future periods. Without clearly defining who owns the dashboard, when it gets updated and how it is used within the business, your dashboard will provide very little value.  

We advise our clients to assign an owner who is responsible for updating the dashboard in an agreed upon timeframe and sharing it across the team.

5. Take Action

It might sound obvious, but don’t forget to use your KPI dashboard!  If you aren’t using your KPI dashboard regularly for meetings, decision making and performance evaluation, it will drive minimal value for your business.

We suggest updating your KPI dashboard monthly and reviewing it with your team, management and investors to discuss prior performance, trends and to game plan for the future. 

Remember, your KPI dashboard tracks if you are meeting your strategic objectives. If your business objectives change, make sure to update your KPIs accordingly.

If all of this sounds great, but you just aren’t sure where to begin, drop us a note and we will be in touch to see how we can help you reach your maximum potential.

Ready to learn more about KPI Sense?

Jen Happ