Strategic Controlling Role

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

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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 21980 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

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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

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Studies about Controlling and CFO Roles1
Strategic Management in the Public Sector6
Strategic Management3
Strategy in the Time of Economic Crises4
The Role of Controlling5
Role and Tools in the Future – Strategic Performance
Management
2
Agenda

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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

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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

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▲ 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

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▲ 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

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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

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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

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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

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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

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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

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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

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Realising a Strategic Performance Management System involves many interwoven
activities
Elements of Strategic Performance Management
activities
• 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)

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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

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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“

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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

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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

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Four dimensions of strategic analysis and strategy conception
Strategic analysis
Financial performance / value creation
Processes / activities and company organization
Customer / market
Resources and potentials

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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

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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

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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

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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

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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 optionsTranslation of development
scenarios into strategic
objectives and rough
measures
Trend objectives for
middle-term planning, open
time horizon

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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.

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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

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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

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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

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From strategy to action
Operationalization of the strategyBusiness 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 %

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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?

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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
Return
Loss
Value
creation
Profit
Costs of capital
Value
destruction
Hurdle-rate
Risk-weighted required rate
of return

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The Shareholder Value Approach
The long-term approch
Capital budgeting,
company
evaluation
Capital
market
theory
Strategy planning
SVA
Fundamentals of the Shareholder Value Approach

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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

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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

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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.

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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

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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

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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!

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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

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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

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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

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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)

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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

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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“)

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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

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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

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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
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Strategic Controlling Role

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