Although the problem is a general one, rather than a current one, it came to my attention once more when I attended a conference on asset management last week. When the topic of the next lecture was shown, the person sat next to me groaned ‘My hair starts to stand on end when I hear key figures. The 350th key figure in there was probably invented and the overflowing report, which no one reads anyway, is once again expanded.’ I could understand their comment only too well as I see the same problem in my field again and again. In order to keep track of requirements by management, colleagues, suppliers, regulators, risk assessments and cost pressure, the system usually reacts intuitively with new key figures. Reports are often expanded with these key figures and in most cases bypass the actual requirement for control.

Too often, these key figures (and especially the linked reports) do not meet the desired effect. It is not clear what exactly should be controlled with the key figures, who the reports are actually for and which risks exist. In addition, there are some redundant key figures with different statements and generally the time required for reading and analysing is often too high. Thus, the added value of key figures is lost and produces only administrative work. At the same time, infrastructure operators can manage and master the requirements pragmatically by mastering the challenges of everyday life with just a few suitable key figures.

Less is more

The more the merrier – many companies deal with the implementation of control tools according to this motto. But writing reports diligently is not an end in itself. Less is often more. That is why it is not about having as many key figures as possible, but introducing only a few useful ones. Everything else can be dropped as ballast. This applies both to the introduction of a new control system and to the optimisation of an existing one. Therefore, in both cases the starting point of every company must be to answer three questions:

1) What do I want to control?

2) How do I want to control it?

3) Which information do I need to be able to control it? Only then can the actual process towards getting the right key figures start. But what are the right key figures? Of course, this varies from company to company and above all depends on their value basis. Following the concept of value-based asset management, the first step is to identify the relevant stakeholders and their values.

A small digression on value basis

Values ​​represent the financial and non-financial requirements of relevant stakeholders. Why are values ​​so important? Imagine an infrastructure company as a coalition of stakeholders, all with specific requirements to run the business with its assets. These requirements must be accommodated in the values ​​and their implementation controlled. The coalition threatens to break up if this fails to work. Ultimately, the value basis of a company results in the values on which the strategic and operative decision-making processes can be constructed, for example, a key figure system.

With this value basis, the goals of the company are then pragmatically adjusted once again and meaningful key figures are introduced. The overall result is a control system that presents the portfolio of key figures, as well as their usage in reporting, which then guides the company from the very top to the operational level. As far as the overriding approach is concerned, things start to get really interesting.

There are so many key figures, how do I find the right ones?

A fully-designed control system can also be integrated across companies and involve technical service providers. So the goal of asset management would also be to establish a consistent ‘line-of-sight’ across all levels of value creation. In addition, effective ‘penetration’ and decision-making support at the operational level can be created with it. However, before looking too far ahead, it is important to remember that integration with different roles (asset owner, asset manager, asset service) can be achieved in small steps. For example, an initial substructure using agile methods such as Scrum can be set up before a step-by-step implementation of comprehensive integration across all roles.

A control system based on the definition classification usually follows a top-down approach in which the asset owner communicates the determined values ​​and goals to the various roles. But now it is the case that different key figures are relevant for each role. These key figures are grouped in the control system to select the appropriate ones. It is normal for there to be a division into financial, strategic and operational key figures. What do specific examples for the asset owners, asset managers and asset service look like? For example, the asset owner is particularly interested in yield and return key figures. In contrast, risk indicators have more relevance for the asset manager at the strategic level. Status indicators are of particular importance to the asset owner at the operational level. This system can be used to define the right key figures for each role. This accompanying prioritisation then takes an almost even more important step by determining the optimal number of key figures and the measures (risk management) behind it. If this does not happen, you will get lost sooner or later in the thicket of key figures and reports again.

Continuous improvement through continuous review

The best preparatory work brings absolutely nothing if the concept cannot subsequently be launched or only with much effort. It is imperative that the implementation is consistently initiated and monitored. A key figures profile could be a suitable tool here, which would serve as a methodological anchor for the implementation and enable structured follow-up. The profile can also be used for continuous improvement and checked against the values ​​and goals in a defined time period, then adjusted if necessary. In addition, another important factor in the implementation is of course the colleagues in the company – back where we would be with the person sat next to me. The best control system will not help without the support of the organisation. All of the employees involved must see added value in the introduction or optimisation of the control system and then actively shape the process.

It does not always have to be an unmanageable and crippling thicket of key figures. With a structured approach that is adapted to the values of the company, key figures can be implemented simply, meaningfully and according to the rule ‘only as much as necessary’. I have been assisting infrastructure owners and operators with this issue since 2011 with my company. Therefore, we know the way out of the situation with our specific experience. Even if the situation for each infrastructure operator is individual, we will bring the right toolkit with us to help.

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