Target-performance analysis: is my digitization strategy working??

Proven instruments from business administration can also help you as a small and medium-sized company in the implementation of your digitization project. To measure the effectiveness of your newly implemented, digital means, a classic controlling cycle is suitable, i.e. a target-performance analysis.

What is a target-actual analysis??

A target/actual analysis enables you to determine whether your defined corporate goals are being achieved or whether you need to make adjustments in the organization by comparing predefined key figures. With this you can find out where you stand with your company and thus react agilely to changes. Regardless of whether these come from outside or are generated by the change process itself.

Excursus: What are key figures?

Key performance indicators are statistical or balance sheet surveys or. Calculations that are compared over a longer period of time. One of the well-known balance sheet indicators, for example, is the equity ratio. In addition, key figures can put certain values into perspective. For example, you can compare whether digitizing your customer support actually has the desired effect of reducing personnel expenses and increasing customer satisfaction. The latter would then have to be measured by surveys and corresponding indicators. As far as possible, industry indicators (benchmarking) can also help you to evaluate your market position compared to your competitors and to identify challenges as well as risks in time.

How does a target-performance analysis work??

Change processes usually do not run in a linear fashion. There are different reasons for this. At the beginning of a process, it is often impossible to determine how the internal and external influencing factors will develop in the course of implementation. Particularly with digitization, much is still in flux, because technical progress is always ongoing. Even the methodologies for implementing digitization cannot be transferred one-to-one from one company to another. Because digitization can mean something different for each industry and also for each company. Here it’s a matter of trying things out, or as they like to say in software development "try and error". However, it is important to determine in time whether the measures you have implemented are really having the effect you wanted them to have. That’s what the target-actual analysis is for. It turns change processes into a cycle of goal setting, planning, implementation and review.

At the very beginning of the target/actual analysis is the objective, i.e. what you want to achieve as a company (by a certain point in time). After that, planning and the setting of measures and budgets begin. Once these have been implemented, you can use the key performance indicators (which you must of course establish during the planning stage) to determine whether the measures you have taken are achieving the desired effects. If not, a new strategy must be developed. be adapted to individual measures or budgets. The cycle starts all over again.

If you would like to know more about methods for the successful implementation of digitization projects, please feel free to come to our company meetings.

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