Ak szczeczin 1109 one page only-eng

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Ak szczeczin 1109 one page only-eng

  1. 1. ICV work group Szczecin 2011-09-09 One page only – Reports for decision makers . this way . Controllerverein.com Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 1
  2. 2. ICV work group Szczecin 2011-09-09 One page only – Reports for decision makers . or that way ? Controllerverein.com Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 2
  3. 3. „What’s not to summerize on only one page, is neither well thought off or well prepared for decisions." ___________________ Dwight D. EisenhowerInternationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 3
  4. 4. Herwig R. FriedagBorn in1950, Dipl. Volkswirt, Dr. rer.pol.Independent consultant focusing on: Implementation of Balanced Scorecard in companies Workshops on Balanced ScorecardInternationaler Controller Verein eV head of the PR committee at ICVVisiting lecturer at Humboldt University in Berlin and Danube University Krems (A) Dr. Herwig R. Friedag Friedag ConsultHobbies: discovering the New, travels, Beskidenstr. 33, D 14129 Berlin Fon +49 30 80 40 40 00 bicycle tours, enjoying the nature, Fax +49 30 80 40 40 01 volleyball, sailing consult @ friedag.com www.friedag.com Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 4
  5. 5. ICV work group Szczecin 2011-09-09 One page only 01 Ideas for good reporting 02 Customer’s data requirements 03 OPO examples 04 Graphics or numbers? © Friedag / Schmidt 2011 5 Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 5
  6. 6. 01 Ideas for good reportingReport’s tasks Sense and aim of reporting is: o creating transparency, o generating management-relevant data o preparing and providing every user with management-relevant data  to make a goal-oriented decision within the company management Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 6
  7. 7. 01 Ideas for good reportingSense of reporting Reporting should be oriented on data requirements of every single report’s recipient . A compact, understandable and meaningful reporting system is here a condition for acceptance and application on all recipients. Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 7
  8. 8. 01 Ideas for good reportingFrequency of a report Depending on time period, reports can be prepared e.g. daily, weekly, monthly, quarterly or annually. They list the current data and vizualize and comment the differences from earlier periods / plans. Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 8
  9. 9. 01 Ideas for good reportingReport’s content In particular for controller, the reporting is an important tool for planing and coordination, because the numbers and analysis of the past influence significantly the decisons about the future. Therefore the transparency regarding finances is crucial for the results and the strategy process. Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 9
  10. 10. 01 Ideas for good reportingReport’s costs Besides: each report costs money: costs of - obtaining data, - data processing and - time for reading / understanding  Ask more often: How much does this report cost? Is it worth it? Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 10
  11. 11. 01 Ideas for good reportingReporting requirements No more than 7 information units for the recipient Why7 ? The reason could be the importance of seven in people perception. It origins from the field of cognitive psychology. Seven is called Miller’s magical number seven. Already more than three hundred years ago John Locke discovered so called „seven phenomena“ when he studied inteligence of an adult. He claimed that the test people (seeing many object for a short moment) have the score of almost one hundred percent, if the number of objects is lower than seven. By more than seven objects is the score much lower.4) 4) Z. Giora: The Magical Number Seven. In: D. Robert (Hrsg.): Occident and Orient- Budapest 1988. S. 175 ff. from: http://de.wikipedia.org/wiki/Sieben Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 11
  12. 12. 01 Ideas for good reportingReporting requirements Our short-time memory  Why7 ? The Miller’s magical number seven describes the fact discovered by George A. Miller: one person can simultaneously keep only 7±2 information units (Chunks) in mind for a short time. The size of short-time memory is determined genetically and cannot be improved by „training”. 1) 1) http://de.wikipedia.org/wiki/Millersche_Zahl Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 12
  13. 13. 01 Ideas for good reportingReporting requirements Quantities clear for people  functioning in practice 1) Methods to handle with complex systems (see Fredmund Malik, requirements management, software engineering) aim in breaking the data into transparent units. The border of transparency is reached by seven system elements. Therefore different effects and recommendations can be explained:  Hierarchies are ineffective, when more than 7 co workers in the same field have one superior.  When you pursue more than 7 goals simultaneously, you can loose the overview.  Discussions with more than 7 participants are not so effective.  The structure of a document should not have more than 7 sub-headings.  A website should have maximal 7 menu items. 1) http://de.wikipedia.org/wiki/Millersche_Zahl Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 13
  14. 14. 01 Ideas for good reportingReporting requirements No more than 7 information units for the recipient An information unit can also consist of information pairs (e.g. strategic – operative, Input - Output) Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 14
  15. 15. 01 Ideas for good reportingReporting coherence How should the information units work? (coherence = consistency) Reports must be a) understandable, b) manageable and c) important  Provide only data, which are also a) understandable for the recipient, b) for which he’s responsible and c) where he is capable of making decisions. Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 15
  16. 16. 01 Ideas for good reportingExercise: Reporting coherence Indicators / Reports must be consistent (= understandable, manageable and important) How can you recognize it? Set of examples: a) understandable, - not understandable b) manageable - not manageable and c) important - not important Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 16
  17. 17. 01 Ideas for good reportingConclusion Not too high complexity of data to get definite and clear results. Requirements of the user:  short and understandable: 7  always clear database  good communication basis thanks to clear massages (What should the site/ graphic reveal?)  quick analysis and decision time Controllers’ responsibility:  He makes an initial selection of data included in the report.  He must check on the basis of his behaviour if the recipient has received / did understand the massage .  He must dig deeper if it’s needed (Deyhle: „liebenswürdige Penetranz“) Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 17
  18. 18. ICV work group Szczecin 2011-09-09 One page only 01 Ideas for good reporting 02 Customer’s data requirements 03 OPO examples 04 Graphics or numbers? © Friedag / Schmidt 2011 18 Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 18
  19. 19. 02 Customer’s data requirementsWho is the controller’s customer? Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 19
  20. 20. 02 Customer’s data requirementsManager und Controller Controller: Controlling Manager: responsible for responsible for business results, business results, finance, finance, processes and processes and strategy strategy transparency Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 20
  21. 21. 02 Customer’s data requirementsWho’s the customer? For every report it should be cleared, which recipient which reports and data - when and really regular ? - needs and in which aggregation the data should be provided. The controller must know which decisions the recipient can make on the basis of his reports  Perception of his responsibility  Being manager’s partner Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 21
  22. 22. 02 Customer’s data requirementsWhat wants, what „should” know the customer? Which decisions are part of his responsibility?  transparent responsibilities What is needed periodically (monthly, quarterly)?  not more than 7 parameters (or their pairs) Parameters cost money  what is the customer able to pay? Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 22
  23. 23. 02 Customer’s data requirementsPlanning und data requirements Reports are not common statements – that’s why it must be established with the responsible manager before:  a plan (budget) with numbers  range for the goals  frequency of the statements as a basis for decisions Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 23
  24. 24. 02 Customer’s data requirementsWhat data is important? Strategic, operative and dispositive data – according to the business model: Strategic = develop: what potentials do we want to establish? Operative = use: what do we want to achieve? Dispositive = apply: what is the time order of potentials? necessary available potentials need for potentials development strategic develop operativ dispositive use apply Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 24
  25. 25. 02 Customer’s data requirements Exkurs: What is strategic, what is operative ?long-term ? short-term ? spending moneydo nothing? strategic operative do? develop potentials exploit possibilities marketing + orders / contract develop capacities skills use capacities quality potential quality assurance staff competence staff development investor relations liquidity Partnership partner’s disposition potential inflow cash inflow Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 25
  26. 26. 02 Customer’s data requirementsWhat data is important? Strategic and operativ, optionally also dispositive data – according to the business modell Problem: which goals could not be achieved / were even exceeded and why? What measures will be taken - by whom responsible and until when – to solve the problems? Where is there need for decisions? Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 26
  27. 27. 02 Customer’s data requirementsWhat data is important for a single manager? It depends on the resposibility of the manager What is important for the manager, must be talked over with him Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 27
  28. 28. 02 Customer’s data requirementsExercise: a reasonable column layoutMonth reporting:planactualdifferences absolutely ordifferences %plan end of the yearforecast the end of the yeardifferences absolutely ordifferences %… and everything on one page? What can we reduce? Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 28
  29. 29. 02 Customer’s data requirementsWhat results from all this for controlling? For every responsible manager usually only one report – only one page with max. 7 information units (or their pairs) Further analysis for demand A report contains one page if possible  planned- and actual figures (as numbers or graphics)  Hints for deflections  Means to achieve the goal  need for decisions Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 29
  30. 30. ICV work group Szczecin 2011-09-09 One page only 01 Ideas for good reporting 02 Customer’s data requirements 03 OPO examples 04 Graphics or numbers? © Friedag / Schmidt 2011 30 Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 30
  31. 31. 03 OPO examplesOPO – recommended structure Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 31
  32. 32. 03 OPO examplesOPO examples: a football club Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 32
  33. 33. 03 OPO examplesOPO examples: ICV-Public Relations Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 33
  34. 34. 03 OPO examplesOPO examples: food industry Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 34
  35. 35. 03 OPO examplesOPO examples: home unit company Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 35
  36. 36. ICV work group Szczecin 2011-09-09 One page only 01 Ideas for good reporting 02 Customer’s data requirements 03 OPO examples 04 Graphics or numbers? © Friedag / Schmidt 2011 36 Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 36
  37. 37. 04 Graphics or numbers?Graphics or numbers It is essential for reporting to provide homogeneous and binding terminology: the same terms are important also when they appear in different places. Different terms should be designated on a different way. Creating a homogeneous companies glossary is an important task for a controller. E.g. Hichert shows, how graphics should be constructed.  http://www.hichert.com Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 37
  38. 38. 04 Graphics or numbers?Graphics or numbers Quelle: http://www.op-inside.de/page31/page6/assets/OP-Cockpit.swf Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 38
  39. 39. 04 Graphics or numbers?Graphics or numbers source: http://www.hichert.com/downloads/consulting/schaubilder/044_798.pdf Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 39
  40. 40. 04 Graphics or numbers?Graphics or numbers Source: http://www.hichert.com/de/consulting/schaubilder/310 Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 40
  41. 41. 04 Graphics or numbers?What is better for whom? … Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 41
  42. 42. 04 Graphics or numbers?More information: http://isc.hs-heilbronn.de/Tools_Excel/ICV/ICV_15/opo_tool.pdf http://www.hichert.com Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 42
  43. 43. Practical group workExercise: choosing a target customer - game (employee / company) company data area of responsiblity personality profile Internationaler Controller Verein eV | Herwig Friedag | 2011 | Seite 43

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