93% of companies in Luxembourg produce at least one dashboard to manage their activities. Over 30% of the respondents, however, admitted to taking uninformed decisions due to the tools not providing the information needed.

These results were unveiled in the third Deloitte Luxembourg CFO survey, which focused on the importance that local companies attach to the use of dashboards and the extent to which they are used to efficiently manage the company’s performance.

The main findings of the survey are as follows:

Dashboards – an information source to manage organisations

Dashboards exist in entities as an information source providing operational and non-operational indicators necessary to oversee the activity.
In fact, the finance department produces dashboards or sets of performance indicators in 93% of respondents’ organisations, with close to 50% of finance departments managing over 3 dashboards. In addition, the survey also shows that in most cases, other departments produce such tools, including the human resources department.

Dashboards are generally perceived as necessary and relevant working tools, but nevertheless considered too complex for some companies

The study showed that all departments, when available, follow the dashboards in place within a company and almost all respondents see them as relevant working tools for the company, as they are deemed useful and easy to use.
On the other hand, 7% of the respondents believe that the difference between the information given in the dashboards and the actual state of the business are not easily identified. In 6% of the cases, dashboards are not even analysed. The lack of relevant information has led to over a third of respondents taking uninformed decisions.

Are performance indicators seen as a reliable source?

Between 1 and 10 indicators in the dashboards are included by 60% of the responding companies, while 26% include between 10 and 20 indicators and 11% take into account more than 20 indicators.

According to Georges Kioes, partner at Deloitte Luxembourg: “Dashboards are often static rather than dynamic, preventing informed decisions from being made in many cases.
Furthermore, we have noticed that dashboards with more than 10 pieces of information are very difficult to follow.”

A clear difference in the nature of the indicators used by each industry was observed. Indeed, the turnover, operating costs and results are the most followed in all sectors, whereas purchasing, and production margins are followed more closely by non-financial businesses.

Performance indicators: a link between strategy and operations

While almost all CFOs surveyed confirm that the goals are consistent with the overall strategy of the company, some indicators are not always reliable: more than a third of the respondents surveyed confirmed using indicators that are more associated with short-term goals.
85% of the participants, however, confirmed that the indicators generally focus on the key drivers of performance rather than on some details of the activity.
The study also shows that external factors are not systematically taken into account when defining performance indicators.

Manual updates: insufficient tools?

90% of the respondents confirmed that data indicated in the dashboards are of good quality and regularly updated. A majority of the CFOs surveyed, however, reported using mainly manual spreadsheets to produce and follow their dashboards and indicators, with only a small proportion of the companies using automated solutions.

"Even though dashboards are used on a regular basis by a majority of the respondents, we have noticed that the processes and reliability of the indicators are yet to be improved." states Petra Hazenberg, partner at Deloitte Luxembourg.

The full version of the Luxembourg CFO survey is available on Deloitte Luxembourg's website at the following address: http://www.deloitte.com/lu/survey/cfo/2014