2.icv kongres controllera, denis petrović controller institute austria

www.contrast.at

Datum:

Prezentacija

Strateški kontroling

Misija kontrolinga u vreme

ekonomske krize

20. maj 2014

Denis Petrović, Mag. oec. ,MBA

2.ICV Kongres controllera Srbije,

Beograd

|

Contrast‘s origins date back to 1980, when the first “Controller Day” took place at the

public Vienna University of Economics and Business (WU).

History

1 2 1980 1982 1991

Research

▲ The 1st “Controller Day“ is

organised at Vienna

University of Economics

and Business (WU)

▲ Main objective: “…to

contribute to the

development of

management control and

strategic management in

both science and practice”

Education

▲ Controller Institut founded

as a non-profit-society

▲ Objective: “…to offer

excellence education and

research in the areas of:

▲ Management Control

▲ Finance

▲ Management“

Management-Consulting

▲ Establishment of consulting

business with primary focus

on strategy and

management control

▲ Objective: “…to offer top-

tier management-

consulting in addition to

high-quality education

activities.“

3

|

Today the organisation benefits greatly from its strong interrelations between

management consulting, education and research.

Today

Research

▲ Several research studies

are conducted in

cooperation with Contrast

▲ New research findings from

WU are integrated in course

offerings of the Controller

Institut

Education

▲ New educational products,

such as business

simulation games for

managers, are developed

in cooperation with

Contrast

▲ Programmes offered

together with WU, such as

the MBA in Controlling

Management-Consulting

▲ CEO of Contrast is Head of

the Institute for Strategic

Management at WU

▲ Contrast Consultants share

their practical experience in

seminars and courses of

the Controller Institut

|

Studies about Controlling and CFO Roles 1

Strategic Management in the Public Sector 6

Strategic Management 3

Strategy in the Time of Economic Crises 4

The Role of Controlling 5

Role and Tools in the Future – Strategic Performance

Management 2

Agenda

|

Controlling according to IGC What does this mean

Controlling is a management activity that makes sure that companies reach their objectives.

As partners of management Controllers make a

significant contribution to the sustainable

success of the organization.

Controllers …

▲ design and accompany the management

process of defining goals, planning and

reviewing so that every decision maker can act in

accordance with agreed objectives

▲ ensure that decision makers act with foresight

and thus make it possible to take advantage of

opportunities and manage risks.

▲ integrate an organization's plans into a

cohesive whole

▲ ensure the quality of data and provide decision-

relevant information.

▲ are an organizations economic conscience and

thus committed to ensuring its success

Details:

http://www.igc-controlling.org/EN/_leitbild/leitbild.php

▲ Controller believe that clear and accepted

objectives are at the core of management. By

ensuring the definition of these objectives the

controller substantially contributes to

successful management.

▲ Controllers take care of planning and reporting.

▲ The Controller has to use all his resources to

support management in achieving their

objectives. The resources include financial

know-how, fast and flexible information as well

as constant reviews and checking. The

sophisticated controller calls this sparring or

consulting.

▲ To be efficient, the Controller needs to have his

systems under control. This takes up a lot of her

time.

▲ By strictly administering management

processes, the Controller forces the company

into a regular review cycle, thus making sure

that problems and opportunities are being

identified early on.

Definition of Controlling

|

Recent developments influence the role of the CFO

▲ Financial crisis and high insecurity of the economic environement

▲ The challenges become more and more diverse and interdisciplinary

▲ Next to data integration, compliance and financing, including the CFO in strategy

development becomes more and more important

▲ Time of crisis strenghten the position of the CFO

▲ The role of the CFO devlops towards the real strategist behind the board’s plans

▲ The CFO becomes challenger and sparring partner for management, also for strategic

issues

Motivation for the Study

|

▲ How is Controlling organized?

▲ What makes Controlling efficient?

▲ What are the dominant tasks?

▲ What are the key benchmarks?

▲ Which instruments does the Controller

use?

The study has targeted the Controllers of the top 500 companies in Austria and the

Czech Republic

Framework and Key Questions

Key Questions Framework

▲ Online - Questionaire

─ Top 500+ in Austria

─ Top 500+ in Czech Republic

─ Total ca. 1.500 companies

▲ Response rate 11,8%

▲ Range

─ Sales 100 m - 40 bn

─ Employees 60 - 30.000

|

▲ What are the key challenges?

▲ What is the State of the Art of the CFO

function?

▲ What are the dominant CFO-Roles?

▲ How does the CFO contribute to

strategy?

▲ Which instruments does the CFO use,

when working on strategy?

The study has targeted the CFOs of the top 500 companies in Austria

Framework and Key Questions

Key Questions Framework

▲ 2-step procedure

─ quantitative research

─ personal interviews

▲ Online-Questionaire of the Top-500+

▲ Response rate 21,8%

▲ Industries

─ Industry 54%

─ Retail 35%

─ Services11%

▲ Range

─ Sales 100 m – 40 bn

─ Employees 60 - 30.000

|

Controlling depends on a close interaction of manager and controller. The only thing

that counts is the next decision = the future!

Controlling is Interaction

▲ Manager

• Has enough to

do to keep the

car on the

road

• Needs fast and

precise

information

• No distractions,

no nonsense

• Pushes forward

and wants to

win

▲ Controller

• Is part of the

team

• Is only

successful,

when the team

wins

• Needs to really

understand the

driver

• Looks forward

and wants to

win

▲ Controlling

• Is seamless interaction to bring the car (company) forward

• has no time to look back

• Is the combination of different talents

|

n=241-264

Controlling has challenges in many areas. MIP, opportunities/risk control and performance

increase are among them.

present vs future priorities

Mediane

▲ look-out

▲ present ▲ future

▲ Controlling has the following priorities

▲ operational planning / budgeting

▲ forecast

▲ analysis and reporting (internal)

▲ strategic controlling

▲ MIP

▲ cost accounting

▲ data management

▲ analysis and reporting (external)

▲ project and investment control

▲ opportunity and risk control

▲ internal consulting

▲ functional controlling (sales, HR)

▲ control of measures

▲ development of processes and systems

▲ special projects

|

Quelle: Ruthner, R./Feichter, A.: „Der CFO als Strategic Performance Manager“. In: CFOaktuell Sonderheft, 7. Jahrgang, März 2013.

The key challenges lie in risk management, financing and strategic controlling

Challenges from the pespective of the CFO

accounting 3%

financial accounting 5%

procurement 6%

internal audit

planning/budgeting 22%

ICS 24%

Forecasting 24%

strategic control 38%

treasury/financing 44%

risk management 49%

projects and investments 9%

functional controlling 11%

Reporting 13%

HR 13%

IT/BI 19%

taxes 22%

7%

consolidation 8%

8% Investor Relations

Top-3-Challenges

of the CFO

risk management is well established,

but lacks a relation to other systems

optimizing the financial mix is an

essential part of treasury

strategy gains in importance, but

needs more sophisticated instruments

|







Management 2

Agenda

|

The role of the CFO can be described in three characteristics

integrated control

▲ The CFO ensures an

integrated control

system …

─ financial and non-

financial levers of

control (KPIs)

─ on all relevant

corporate levels

─ broad employment

(decision support,

reporting and

incentives)

▲ managing volatility

of results

financial excellence

▲ The CFO ensures efficient

structures, processes

and systems …

─ state-of-the art finance

organization and

processes

─ information and

integration standards

─ automatization of data

analysis

▲ Devising and

implementing a master

plan for finance and

controlling

Dimensions of the CFO role

service & sparring

▲ The CFO acts as a

service and sparring

partner to management

(= business partner)

─ support to profit

centers and business

units

─ personal relation to

decision makers

─ adapting organization

structure (close to the

customer)

▲ establishing relevant

communication

platforms and tools

|

The "Strategic Performance Manager" is an ideal vision for the corporate CFO

Finance

Manager

Strategic

Performance

Manager

Performance

Manager

Business

Partner

Exzellence in structures,

processes & systems in

finance


Seperating CFO Roles

integrated control

system for strategy and

operations


Role Focus requirements

accepted service-

& sparringpartner for

management


controlling the

implementation of

strategy through an

integrated control

system


integrated control,

service & sparring

financial

excellence

integrated

control

service &

sparring

financial

excellence

integrated

control

service &

sparring

financial

excellence

integrated

control

service &

sparring

financial

excellence

integrated

control

service &

sparring

|

In Austrian companies the role of the "Strategic Performance Manager" is dominating

Roles of the Austrian CFOs

Finance Manager (1%) Performance Manager (13%) Business Partner (33%)

High rates in the areas

of financial excellence,

integrated control

systems, service &

sparring

„Stuck-in-the-middle“ (11%)


Strategic Performance Manager (41%)

financial

excellence

▲integrated

control

service &

sparring

financial

excellence

integrated

control

service &

sparring

financial

excellence

integrated

control

service &

sparring

financial

excellence

integrated

control

service &

sparring

financial

excellence

integrated

control

service &

sparring

|

Realising a Strategic Performance Management System involves many interwoven

activities

Elements of Strategic Performance Management

acti

vit

ies

• Clear and accepted

strategy linked to

• a strategic financial goal.

• Incentive systems linked to

strategy,

• integrated management

processes

• fit of organizational

structure and strategy

developing objectives from a strategic and

financial goal system

devising and priorising project-/ and

program portfolios to implement strategies

mid-term planning linked to strategy as the

basis for operational budgets

setting up a clear and precise reporting to

support implementing strategies

logical, strategic value drivers for a flexible

planning and simulation model

controlling volatilities (risks)

|

In-between Strategy and operative Controlling

Big pictures

Organization

Budgeting

Strategy-focused middle-term-planning

Project-/Program portfolio-management

Integrated strategic

and financial goal-

system

Vision

Strategy and strategic/financial objective

|

CFOs of Austrian companies more and more become "Strategic Performance

Managers" – financial excellence is an important basis for this development

▲ The CFO is challenger & sparring partner of management and is an important player in

corporate strategy

▲ The role of the CFO as a Strategic Performance Managers (41%) dominates in Austrian

companies

▲ Financial excellence is an important condition for development in the dimensions integrated

control and service & sparring

▲ In Strategic Performance Management more work is needed to ensure a forceful

implementation of strategies

▲ The contributions of the CFO to corporate success are considerable and will increase in the

future

CFO-Study 2012 „The CFO as Strategic Performance Manager“

|







Management 2

Agenda

|

Schools of strategic management

Theory

External:

Industry attractiveness

Market-based view

Advantageous positioning

in the competitive

environment

Michael Porter

Stakeholder-based view

Internal & external:

Stakeholder relationship

Unique stakeholder

relationships

Jeffrey H. Dyer/

Harbir Singh

Resource-based view

Internal:

Availability of resources

Better availability of scarce

resources and core

competencies

Gary Hamel/C. K. Prahalad

Jay Barney

Competitive

advantage

Focus

Most eminent

authors

80 90 2000

|

Generation of

strategic

option

Strategy

communication and

cultural change

Cycle of value-based management

Changes

Analysis

Strategy check

On-going value

management

Strategy

specification

Adaptation of

structures,

systems and

processes

Assessment

and selection

of options

|

Four dimensions of strategic analysis and strategy conception

Strategic analysis

Financial performance / value creation

Processes / activities and company organization

Customer / market

Resources and potentials

|

The strategic analysis‘ objective is to derive a basis for decision-making in order to

develop a proper strategy.

Strategic analysis

Definition of the own

business

(1) What is our mission?

(2) Who is our customer?

(3) What does the customer want?

(4) What are our results?

(5) What is our plan?

Environment / industry

▲ Environment analysis

▲ Stakeholder analysis

▲ When needed: Industry

analysis

▲ When needed: Market analysis

(quantitative)

Organization

▲ Organization analysis

▲ Potential analysis

Strengths & weaknesses,

core competencies Opportunities & threats,

Key success factors

Sharpening:

„Where is our

organization at?“

▲ Contractual

fundamentals

▲ Mission

statement

(mission, vision,

values)

Determining factors

Basics for strategy development

|

During strategy development, special attention has to be paid to the internal and

external analysis.

Strategic analysis

Organization

analysis

Potential analysis

▲ Analysis of core competencies

▲ Cost-structure analysis

▲ Analysis of strategic business fields

▲ Derivation of potentials for improvement which can later on be integrated in

the target plan.

Environment- /

industry analysis

Stakeholder

analysis

▲ General trends in society, technology, economy, etc.

▲ Analysis of the industry‘s dynamics

▲ Methodology: STEP-analysis, Porter‘s 5 Forces

▲ Organizations / persons, that (may) influence the company

▲ Internal and external

▲ Methodology: Structured interviews with central stakeholders

I

N

T

E

R

N

A

L

E

X

T

E

R

N

A

L

Market analysis

▲ Quantitative market analysis with selected analysis tools

Opportunities,

threats

Strengths,

weaknesses

|

From the analysis to the generation of strategic options

Step by step

External analysis Internal analysis

Strategic options

▲ Future of the industry

▲ Opportunities / threats

▲ Key success factors

▲ Resources

▲ Strengths / weaknesses

▲ Strategic resources

▲ Concentration on strengths that are at the

same time key success factors

▲ Minimizing “deadly” weaknesses

▲ Using opportunities consequently

▲ Counterbalance risks

|

Dimensions of strategy evaluation

Think twice

Strategy evaluation

qualitative quantitative

Internal

practicability

▲ Capabilities

▲ Resources

▲ Acceptance

Coherence

▲ Internal „fit“

▲ External „fit“

Risk PIMS SVA Real

options

Middle

term

planning

|

Middle-term planning

Operationalization of Strategy

Inclusion of external

benchmarks

Documentation of planning

premises

Avoidance of a „Hockey-

Stick“-planning

Performance budget, P&L-account, investment plan, CF-statement, planned balance sheet

Time horizon: 3-5 years

Scenario-planning

Highly aggregated planning

Concentration on key-figures

Translation of strategies into a middle-term measure-program


Strategic options Translation of development

scenarios into strategic

objectives and rough

measures

Trend objectives for

middle-term planning, open

time horizon

|

Realization of strategies

Measurement parameters

Measures

Controlling of measures

e.g. customer-satisfaction

e.g. conceptualising and

implementing complaint

management

e.g. concept for a complaint-

management exists

Strategic objectives

e.g. develop clear communication

structures towards customers

Measures the extent of

goal attainment

Identifies whether the

single measure has

been reached

Contribute to a better

goal attainment

In order to reach strategic objectives, relevant measures have to be defined. Through

measurement parameters goal attainment can be determined.

|

Operationalization of strategies

Big picture

Reasons for the failure of strategies

▲ No sufficient specification of the vision or the

strategy

▲ No link between strategy and resource

allocation

▲ No link between strategy and targets of

departments, teams and employees.

Starting situation

▲ Defined strategies at corporate-, BU-, and

department-level.

▲ Availability of results regarding the

qualitative and quantitative strategy

evaluation (incl. premises)

▲ Availability of rough strategic measures

To Do’s during strategy specification

▲ Derivation of strategic sub goals

▲ Make the implementation of strategic (sub-)

goals measurable

▲ Agreement on plan-targets for departments,

teams and employees

▲ Development of a detailed measure-

program for goal attainment

▲ Allocation of strategic budgets and

employee resources for implementation of

measures

▲ Coordination of sub goals, plan-targets and

measures between business units

|

Development of strategic options: Approaches

Options

Step 1: Development of ideas and starting points

Analytical approach Creative approach

Step 2: Consolidation to consistent strategic options

Objective:

With the help of instruments, theoretical

development possibilities are developed

in an analytical process

Sample instruments:

▲ Business model (Strategy Map)

▲ Product/market-matrix

▲ Industry value chain modell

Objective:

Through creative exercises thinking

barriers are breached.

Sample instruments:

▲ Convention Hunting

▲ Wear a different hat

▲ What-if Process

|

Central value-creation-opportunities

Tools

▲ Portfolio correction

Withdrawal from regional markets

Withdrawal from business areas or

customer segments

▲ Withdrawal from certain value chain stages

▲ Reengineering/cost management in central

processes

▲ Growth in the core business

▲ Approach new customers

▲ Growth in market share through acquisition of

competitors

▲ Opening up new regional markets

▲ Increasing the degree of integration

▲ Development of new business areas with existing

core competencies

▲ Internal vs. external growth

Growth (examples)

Derivation of central value creating possibilities for the

company

Re-dimensioning and re-engineering (examples)

Analysis results Supporting instruments

Contrast business

model databank

Contrast

Strategy

Creating Set

Environment,

industry Company Business area

|

From strategy to action

Operationalization of the strategy Business model-based strategy

“24-hour-

service hotline”

Action program Vision/

Strategy Perspective

Key success

factors

Measurement

parameters Planned values

How can

they be

measured?

Which value

is intended?

How can it

be

achieved?

What are the key

success factors?

Financial

performance/

accretion

Customer / market

Processes and

structure /

organization

Resources and

potentials

Top 3 position in

the premium

segment

Outstanding

growth

Customer

satisfaction

Growth in

market share

Customer

Satisfaction Index

(CSI)

3 %

CSI 80 %

|







Management 2

Agenda

|

Industry-related reasons Internal „technical“ reasons

Why Shareholder-Value-concepts?

▲ Increasing pressure from the capital market

▲ Competitiveness necessary not only in the

product market but also in the capital

market

▲ Globalisation and internationalisation of

capital markets

▲ Traditional profit ratios barely correlate with

the development of the market value

▲ Imperfection of the middle-term planning

─ Limited planning horizon

─ Lack of consideration of risk aspects

─ No consideration of the time value of

payment flows

─ Distortion at investing in intangible

assets

─ Wrong incentives for management

(problem of underinvestment)

What it has changed?

|

Balance sheet vs. value orientation

Long-term approach

„There is no profit unless you earn the cost of capital“ (Peter Drucker, 1954)

Traditional accounting Value-based-approach

0 Retu

rn

Loss

Value

creation Profit

Costs of capital Value

destruction

Hurdle-rate

Risk-weighted required rate

of return

|

The Shareholder Value Approach

The long-term approch

Capital budgeting,

company

evaluation

Capital

market

theory

Strategy planning

SVA

Fundamentals of the Shareholder Value Approach

|

Initial situation I

▲ Insufficient specification of strategic objectives and strategies

▲ Missing quantification of strategic objectives and strategies

▲ Performance Measurement is only concentrated on operative financial indicators

▲ Market-based and financial planning- and management systems are not sufficiently integrated

▲ Measures in order to optimize market performance and financial performance are not

sufficiently coordinated

▲ Profound understanding of value- and cost-drivers is often missing in the management team

Linking financial and strategic values

„Strategy world“ and „financial world“ often co-exist and are most of the time not linked systematically

|

Initial situation II


The degree of financial penetration of strategic decisions is too low.

Influence on

substancial

financial

performance

Level of action

Strategic

positioning /

business model

Business area

strategy

Operation

Degree of financial penetration

Extent and level of

detail of quantification

Actual

|

Challenges I

▲ Specification and quantification of strategic objectives and strategies

▲ Supplementation of performance-measurement through strategic pre-control measures

▲ Integration of market- and financial-based planning and controlling systems

▲ Missionizing the company for financial performance targets


Contentual business planning and business controlling as well as financial planning and

financial controlling have to be systematically linked between all levels of action.

|

Challenges II

Overcoming the dichotomy of the planning and management pyramid

strategic management control

operative management control

Department

strategy

Business area

strategy

Quantification of strategy (DCF)

Mission

Vision

Company

strategy


Yearly budget

Rolling forecasts

|

Goal: Integrated strategic and financial planning and controlling pyramid

Company

strategy

Contentual

vision

Business area

strategy

Allocation of resources

Department

strategy

Usage of available resources (measures)

Accretion-potential

(NPV, option value)

Financial

performance

vision

Planned value

added by BUs

Value generation

Planned value

added by departments

Operative performance Liquidity

Investment Financing-structure

|

Financial Leadership

▲ Fields of action for goal

attainment

▲ Controlling of measures

▲ Financial and strategy-based success

control

Strategy

▲ Creation and defence of

competitive advantages

▲ Objectives with regard to Business portfolio (what?)

Area (where?)

Business model (how?)

Market position (product/

market performance)

Corporate Finance

▲ Creation of economic value

▲ Objectives with regard to Company value

Economic value added/

company profitability

Capital market performance (TSR)

Cost of capital

Capital productivity/

capital expenditure (CAPEX)

Financial Leadership links strategy with corporate finance!

|

What distinguishes Financial Leadership as a management-approach?

▲ CEO-centric

▲ Role models and vision as prevalent

guidance

▲ „Pre-management“ via leadership style

as well as corporate culture (mind-

sets, values)

▲ Alignment of all managers to the

contentual goals of corporate

development

Conventional management

approaches

▲ Underlining the importance of the

whole management team

▲ Emphasising the necessity of strategic

objective-systems as well as

integrated planning- and

management-processes

▲ Completition through a set of strategy-

based performance-indicators

(financial and non-financial)

▲ Alignment of all managers to financial

performance targets and creating

awareness for value- and cost-drivers

Financial Leadership

|

Quality characteristics of a strategy-based financial corporate management

▲ Ensure compatibility of strategic goals with financial performance goals

▲ Essential management processes have to be „financially sharpened“ (especially

strategy planning, investment decisions)

▲ Strategic awareness: Consideration of the impact of all substantial decisions on the

company‘s strategic position as well as on strategy execution

▲ Breaking down strategic goals and strategies into detailed goals regarding resources

/ organizational capabilities, processes, market performance and financial

performance

▲ Financial controlling of strategy execution

▲ Compatibility of management incentive systems with the company‘s objectives

|







Management 2

Agenda

|

Genuine tasks of strategic controlling

▲ Strategy evaluation

─ qualitative

─ quantitative

▲ Strategy implementation: Linking of strategy and operations

─ Measurement plans and budgeting

─ Balanced Scorecard

─ Strategy-based incentive systems

▲ Monitoring of strategy execution:

─ Control of execution (basis: action plans)

─ Control of outcome (basis: BSC)

─ Control of premises (basis: assumptions during strategy planning)

─ Strategic foresight

The roll of Controlling

|

Success-critical fields of action

▲ Strategy quantification: Financial evaluation of strategies and success potentials

(NPV, value of options)

▲ Strategic resource allocation (strategic investment- and de-investment-decisions:

Especially design of business portfolios and value chains)

▲ Value-based profit measurement

▲ Company-wide strategic risk management

▲ Measurement controlling of strategy implementation

▲ Cost/utility-optimization of accounting-, planning-, and management-systems

(reduction of complexity)

▲ Improving strategic and financial awareness of responsible management staff

(management development, teambuilding)


|







Management 2

Agenda

|

Strategic Performance Management ensures that strategies in the public administration

are implemented as planned and efficiency and effectiveness objectives met.

What is Strategic Performance Management? What is Outcome oriented management?

Budget What 1-3-year-budget is required to achieve our

goals?

Medium-term planning – What measures do we need to take?

Insufficient link

between strategy and

operational execution

Strategy How do we meet our objectives?

Strategic Performance Management,

understood as systematic performance

and outcome-oriented management

control in the public administration,

aims at ensuring that strategies are

implemented as planned in order to

meet efficiency and effectiveness

objectives.

Based on Proeller, I. & Siegel, J.P., 2009

|

Strategies are planned top-down and are based on the outcome that is to be achieved.

Strategic Focus on Outcome

Outcome Output Processes Input

What outcome do we

want to achieve for our

stakeholders?

What processes need to

be in place in order to

produce the planned

output?

What output do we need

to produce in order to

achieve the planned

outcome?

What resources do we

need in order to

guarantee the functioning

of the processes in

place? (number and

qualifications of staff, raw

materials, infrastructure)

Outcome Quality Process Quality

Structural Quality

Impact

(influenced by the organisation and external factors)

Realisation / Implementation

(managed by the organisation itself)

Contributes to Effectiveness

(“doing the right things“)

Contributes to Efficiency

(“doing things right“)

|

Outcome-based objectives need to be defined, which are measured against indicators

and achieved through the implementation of measures.

Strategic Focus on Outcome – Objectives, Indicators and Measures

Outcome Output Processes Input

What outcome do we

want to achieve for our

stakeholders?

What processes need to

be in place in order to

produce the planned

output?

What output do we need

to produce in order to

achieve the planned

outcome?

What resources do we

need in order to

guarantee the functioning

of the processes in

place? (number and

qualifications of staff, raw

materials, infrastructure)

What do we want to achieve?

How are we going to know if we have achieved our objectives?

What do we need to do in order to achieve our objectives?

Objectives

Measures

Indicators

capped

|

The second implementation phase of the Austrian Federal Budget Reform includes the

introduction of the outcome-orientation principle.

Source: BKA (2013), adapted by Contrast

Outcome-orientation Principle

Dept. / Service Provider

Input Output Outcome

Political orders Outcome

objectives

Processes

• Personnel

• Budget

• Materials

• Partners

Greater safety in

Austrian traffic

Objective:

Lower number of accidents with

personal injury in Austria

• Greater volume of traffic

• Weather conditions Other

influences

Logic of Outcome-Orientation in Austria

|

Different target groups benefit from outcome-orientation.


Target Groups of Outcome-orientation

Outcome-orientation as an Instrument for Four Target Groups

National Council Federal Government

and Ministers

Public

Administration The Public

▲ Are better informed for

budget negotiations

▲ Can demand

performance based on

objectves from

ministries and the

administration

▲ Has greater

transparency over

government‘s activities

& performance

▲ Benefits from greater

efficiency

▲ Increased equal

treatment of women

and men

▲ Benefit from increased

transparency over their

activities and

performance

▲ Can better justifiy their

budget proposal and

other policies or

decisions

▲ Can work more

efficiently

▲ Enjoys greater

transparency

▲ Can use performance

information and

outcome objectives for

discussions with

stakeholders

|

The outcome-orientation principle is strongly linked to other contents of the Budget

Reform.


Interdependencies of Outcome-orientation with Other Instruments

From 2009

Budget structure

(Global Budgets) Estimation and

calculation system

Restuls-oriented

management control

of the public

administration

Outcome-orientation (incl. equal treatment

of women and men)

4-year-expenditure

limits,

strategy report

Institutional basis

From 2013

Core Contents of the Austrian Federal Budget Reform

|

The environment and the organisation have to be analysed first, strategic objectives,

measures and indicators derived and implementation monitored.

Strategy Analysis, Planning, Implementation and Monitoring

Strengths and Weaknesses Opportunities and Threats

Environment Organisation

▲ PESTLE Analysis

▲ Stakeholder Analysis

▲ Organisational Analysis

▲ Potential Analysis

▲ Develop strategic objectives (“What do we want to achieve by 20XX?“)

▲ Derive measures (“What do we need to do to accomplish our objectives?”)

▲ Define indicators (“How do we know if we have accomplished our objectives?”)

Strategy

Analysis

Strategy

Planning

Strategy

Monitoring

▲ Track individual milestones in order to ensure implementation of measures

▲ Tack individual indicators in order to guarantee accomplishment of objectives

▲ Use performance management system / process

Strategy

Implementation

▲ Realise planned measures

▲ Establish Integrated Process and Quality Management System

1

2

3

4

2.icv kongres controllera, denis petrović controller institute austria

Economy & Finance