Effective key figure systems in controlling – how to make better decisions

Importance of key figure systems in controlling

Key performance indicator systems are central controlling instruments that help companies to measure, monitor and manage their corporate performance. They provide a basis for well-founded decisions by translating complex issues into quantifiable figures. Key figures help to evaluate the efficiency and effectiveness of business processes and the profitability of individual products, identify risks and achieve strategic goals. Historically, key figures have evolved from simple financial measures to comprehensive key figure systems that reflect various aspects of a company's activities.

In the modern corporate environment, performance measurement systems have become indispensable. They enable managers not only to evaluate past performance, but also to predict and manage future developments. By analyzing key figures, companies can react more quickly to changes in the market and adapt their strategies accordingly.

Basics of key figure systems

Definition and classification of key figures

Key figures are numerical values that provide information on business management issues. They can be divided into financial key figures, such as return on investment, profit, gross profit margin and cash flow, and non-financial key figures, such as customer satisfaction or employee turnover. Managers use performance indicators to optimize operational processes, while strategic goals are kept in view through the use of controlling indicators.

Key figures can be further divided into absolute and relative key figures. Absolute key figures indicate direct numerical values, such as sales in euros, while relative key figures represent ratios or percentages, such as the return on sales. A further distinction can be made between internal and external key figures. Internal key figures relate to internal company processes, while external key figures take market or environmental factors into account.

Design and structure of key figure systems

A KPI system should be hierarchically structured in order to cover different levels of information. Well-known approaches such as the balanced scorecard integrate financial and non-financial key figures in order to provide a holistic view of the company's performance. Such KPI systems promote strategic alignment and support the implementation of operational measures.

The balanced scorecard, for example, divides each key figure into four perspectives: Finance, Customers, Internal Processes and Learning and Development. Each perspective contains specific objectives and key figures that are linked to each other. This link helps to understand and manage the impact of measures in one area on other areas of the company.

Selection and implementation of key figures

Criteria for the selection of relevant key figures

Relevant key figures are characterized by their measurability, relevance and comprehensibility. They must be easy to interpret and tailored to the company's specific objectives. A balanced selection ensures that both short-term and long-term corporate goals are taken into account.

When selecting suitable KPIs, companies should ensure that they are clearly defined and measurable. The data basis for the key figures must be reliable and consistent in order to enable precise analyses. In addition, the selected KPIs should be directly linked to the company's objectives in order to ensure targeted management.

Steps for implementing a key performance indicator system

The implementation of a KPI system begins with the definition of objectives and needs analysis. This is followed by the development of the system, including the identification of suitable key figures and their test phase. Some companies use specific models such as the RL KPI system to monitor their financial and operational performance in more detail. After implementation, comprehensive training of employees is essential to ensure that the KPI system is used effectively.

The implementation process can be divided into several steps:

1. Target definition: Clear definition of the targets to be achieved with the KPI system.
2. Needs analysis: Identification of the necessary information and data sources.
3. Development of the system: selection and definition of the key figures, structure of the data collection and analysis processes.
4. Test phase: Pilot projects and tests to check functionality and practical suitability.
5. Introduction: Rollout of the system throughout the company.
6. Training: Training employees in the use of the new KPI system.
7. Monitoring and adaptation: Continuous review and adaptation of the system to ensure that it meets changing requirements.

Application of key figure systems in controlling

Monitoring and reporting

Regular reporting and ad hoc analyses are essential elements of monitoring. Dashboards and other visualization tools facilitate the presentation of complex information and support decision-making. A well-structured reporting system helps to identify deviations at an early stage and take appropriate action.

By using modern BI (Business Intelligence) tools, data can be monitored and analyzed in real time. These tools offer extensive data visualization functions that make it possible to identify complex correlations at a glance. Reports can be created and distributed automatically, which increases the efficiency and speed of information provision.

Management and control

Key performance indicator systems enable target/actual comparisons and deviation analyses, which lead to the identification of performance deficits and the development of countermeasures. Continuous monitoring and adjustment of processes ensures that corporate goals are achieved.

An effective control system includes regular reviews and meetings in which the current key figures are analyzed and discussed. Deviations from the target values are identified and their causes analyzed. Measures for correction or optimization are initiated based on these analyses. This continuous process of monitoring and adjustment ensures that the company always stays on course and achieves its goals.

Integration of KPI systems into the corporate strategy

Link with strategic goals

An effective KPI system is closely linked to the company's strategic goals. Target hierarchies and KPI trees help to visualize and operationalize this link. This enables consistent and targeted management at all levels.

Strategic goals are often broken down into specific, measurable sub-goals, which are monitored using corresponding key figures. This makes it possible to continuously measure and control progress towards the overarching corporate goals. Linking KPIs to strategic goals ensures that all areas of the company are working towards the same goals and aligning their activities accordingly.

Success factors and challenges

Success factors in the implementation of KPI systems include a clear definition of objectives, the involvement of all relevant stakeholders and continuous review and adjustment of the system. Typical challenges include resistance within the organization and the complexity of data collection and analysis.

An important factor in your success is the acceptance of the KPI systems by employees. This requires comprehensive communication and training to promote understanding and acceptance. Resistance can be overcome through transparent and participatory implementation. In addition, the KPI system must be flexible enough to adapt to changing conditions and requirements.

Technological support and future trends

Digitalization and big data

Digitalization and the use of business intelligence (BI) tools are revolutionizing controlling. Real-time analyses and the automation of reporting processes increase the efficiency and accuracy of data. Big data enables deeper insights and the development of more precise forecasts.

Modern BI tools offer extensive data visualization functions that make it possible to identify complex correlations and key performance indicators (KPIs) at a glance. They make it possible to collect large amounts of data from various sources and analyze them in real time. This supports decision-making and enables companies to react quickly to changes in the market environment. Predictive analytics and machine learning are other technologies that will play an increasingly important role in the future.

Future trends in controlling and key figure systems

Future trends such as predictive analytics and artificial intelligence (AI) offer new opportunities for optimizing corporate management. Sustainability indicators and ESG (environmental, social, governance) are becoming increasingly important, as companies are increasingly focusing on sustainable and socially responsible business models.

Predictive analytics enables companies to predict and proactively manage future developments. By using AI, complex data patterns can be recognized and used to make informed decisions. Sustainability metrics and ESG criteria are becoming increasingly important as investors and other stakeholders pay more attention to the long-term sustainability and social responsibility of companies.

Case studies and practical examples

Successful implementation in companies

Practical examples of successful implementations show how companies can increase their efficiency and achieve their strategic goals through the use of KPI systems. Best practices and lessons learned offer valuable insights and recommendations for other companies.

Examples include the implementation of the balanced scorecard in a multinational company, which was able to successfully implement its strategic goals through clearly defined key figures and regular reviews. By continuously adapting the key figures to changing market conditions, the company was able to increase its competitiveness and strengthen its market position.

Analysis of failures

Analyzing failures in the implementation of KPI systems helps to identify and avoid common mistakes. Typical problems, such as insufficient data quality or a lack of acceptance among employees, can be overcome through targeted measures and adaptation strategies.

A common problem is inadequate data quality, which can lead to incorrect or misleading analyses. This can be avoided by implementing robust data management processes and regular data quality checks. Another problem is the lack of acceptance among employees, which can be improved by providing comprehensive training and involving employees in the implementation process.

Conclusion and outlook

Summary of the key findings

Effective KPI systems are crucial for successful corporate management. They provide a structured and transparent basis for decision-making and contribute to the achievement of strategic and operational goals. By continuously monitoring and adjusting key figures, companies can increase their efficiency and secure their long-term competitiveness.

Future prospects and recommendations for action

The further development of KPI systems through technological innovations and the integration of sustainability aspects will further strengthen the role of controlling. Companies should continuously review and adapt their KPI systems in order to meet changing requirements. The use of predictive analytics and artificial intelligence offers new opportunities to optimize decision-making and corporate management. Sustainability indicators and ESG criteria will become increasingly important as companies have to pay more attention to long-term sustainability and social responsibility.

By continuously developing and adapting their KPI systems, companies can ensure that they are always at the cutting edge of technology and meet constantly changing market conditions and requirements. This will help them to achieve their strategic goals and secure their long-term competitiveness.

Frequently asked questions

1. what are the most important types of key figures in controlling?

The most important types of key figures in controlling are financial and non-financial key figures. Financial indicators include measures such as sales, profit, profitability, liquidity, return on investment, economic value added and cash flow. Non-financial key figures relate to areas such as customer satisfaction, employee satisfaction, process quality and innovation rate. Both types of key figures are essential in order to obtain a comprehensive picture of the company's performance.

2 How do you select the right key figures for a company?

Selecting the right KPIs requires a thorough analysis of the company's objectives and strategies. Relevant criteria are the measurability, relevance and comprehensibility of the key figures. They should be directly linked to the company's strategic goals and cover both short-term and long-term perspectives. A balanced mix of financial and non-financial indicators ensures a comprehensive assessment of the company's performance.

3. what are the main advantages of using a KPI system?

A key performance indicator system offers several advantages, including

• Improved decision-making: Quantitative data enables well-founded decisions.
• Transparency and control: Clear metrics make it easier to monitor and control business processes.
• Strategic alignment: Key figures help to link the company's activities with its strategic goals.
• Early detection of risks: Risks can be identified and addressed at an early stage through continuous monitoring.

4. what challenges can arise when implementing a KPI system?

The challenges involved in implementing a key performance indicator system include

• Data quality: Insufficient or inconsistent data can impair the informative value of the key figures.
• Employee acceptance: Resistance within the organization can hinder the use and effectiveness of the KPI system.
• Complexity: Collecting, analyzing and interpreting data can be complex and time-consuming.
• Adaptability: The KPI system must be flexible enough to adapt to changing conditions.

5. how can the acceptance of KPI systems among employees be improved?

The acceptance of KPI systems can be improved by the following measures:

Transparent communication: Clear and regular communication about the purpose and benefits of the KPI system.

Training and further education: Comprehensive training programs to support employees in using the KPI system.

Employee involvement: Participatory approaches in which employees are involved in the development and implementation of the KPI system.

User-friendliness: Ensure that the KPI system is user-friendly and easily accessible.

6 What role do technological innovations play in the development of KPI systems?

Technological innovations play a decisive role in the development and improvement of KPI systems. Business intelligence (BI) tools and big data analytics enable the collection, integration and analysis of large amounts of data in real time. Predictive analytics and artificial intelligence (AI) offer advanced possibilities for predicting future developments and optimizing decision-making. These technologies increase the efficiency and accuracy of KPI systems and help companies to react more quickly and flexibly to market changes.