Previously seen as fancy add-ons with questionable ROI, business dashboards are starting to drive business in LBM.

This mock up of Activant Solutions' Performance Driverdashboard shows how a user can compares payables (A/P) andreceivables (A/R) along with other key metrics. When John Askin Jr. walks into work each morning at the Standard Group, a distributor of exterior building materials based in Tinton Falls, N.J., the CFO sees exactly what was sold at each of his six locations the day before. Logging onto a business dashboard that's part of Activant Solutions' Performance Driver Suite, he can see the gross profit on each order that his salespeople wrote. He doesn't have to search for those numbers; the information is "pushed" to him based on predetermined parameters.

"If I see something funky, I can get on the phone right then, call the store, and ask what happened," Askin says. "Every 15 minutes, I know exactly where we are for the day, and I don't have to run a report to do it."

Once viewed as superfluous technology in the lumber and building material industry, business dashboards are finding homes at more and more dealers. Built by software companies such as Activant, Progressive Solutions, and Spruce Computer Systems, dashboards often feature a graphical interface that displays needles and gauges like those on the dashboard of a car. On a single screen, they show metrics such as year-to-date sales, gross profit margins, inventory levels, expenses, and accounts receivable. Depending on how a user sets them up, they'll display those numbers in comparison with last year, last month, or last week, with easy-to-read arrows–in red or green–indicating a category's trend. By clicking on any given number, a user can drill down into the data to determine why a trend is occurring.

"The aim of any good dashboard should be to let you know where you are, and to see where any problems may be," says John LaFave, marketing director for Spruce, which is beta-testing a dashboard for general release to its 500 LBM customers by year's end.

While many seasoned dealers may have an instinctive feel for how their companies run, users say dashboards help them manage change. "Things are changing so fast today that, in the blink of an eye, you could be running backward," says Joost Douwes, vice president at six-yard Chinook Lumber in Snohomish, Wash., which implemented Progres-sive's bisTrack dashboard last year and uses it to keep tabs on to-date, per-store sales as well as how the company is performing against its profit plan. "Just 'feeling' that the business is doing OK isn't good enough anymore." Adds Graham Rigby, Progressive's bisTrack product manager: "A lot of times in the lumber business, people know what they know. But sometimes, you need to figure out what you don't know, too. Dashboards can help do that."

At Contractor Express, a single-yard operation in Oceanside, N.Y., using Activant's dashboard helped vice president Greg Failla figure out a potentially troubling trend. "Our sales were slightly down, even though the number of our accounts was up pretty dramatically," Failla says. "What we saw was that our average dollar amount per sale was off. We found that our remodeling customers are staying just as busy as last year, but they're doing smaller jobs. That was actually a relief, because at least we know we're not losing market share."

When selecting a dashboard product, be sure to verify that it can track the metrics you want. If there's something unique that you want to analyze, such as how much you pay for shipping from one supplier versus another, you need to make sure the system can track that, or be modified to do so, before buying it.

The systems can cost from $10,000 to $25,000 to implement, depending on which modules you choose, and support and training cost extra. But users say they're worth it. "We'll get to positive ROI within year two," says Chinook's Douwes. Since implementing the system in early 2006, Douwes says Chinook's overall profit margin has gone up three percentage points, thanks in part to the dashboard. "We're going to continue to work with it so that it pushes more data to us," he says. "That's where the magic happens."

–Joe Bousquin is a contributing editor for ProSales.