Setting KPI targets for your company with help of the Target Simulator

Liselotte Lont
Published on
October 6, 2022

When setting the right targets for your organization, you should always look at how your key competitors perform. This way, you can find out if your strategic goals are ambitious enough, yet realistic. Which steps should you follow to set the right kpi targets? And how can our Target Simulator be of help? Let's find out. 

Easily simulate your targets

The Performance Monitor allows you to benchmark your performance against your competiton. But, within the dashboard there is also an extra tool, the Target Simulator. As the name implies, it is a tool that helps you to easily simulate your targets.

In rapidly changing times where cost increases play an important role, being able to efficiently and substantively simulate your multi-year targets is all the more important. The Target Simulator enables you to do this by answering these important questions:

  • What is my gap to the top performers in the market?
  • What improvements do I need to make on which drivers to close the gap?
  • How do I ensure that the target setting remains realistic and substantiated?

What is your gap to the top performers of the market?

Below, the gap to the top performers in the market is visualized. Say you want to become a top 5 player over a 5 year period. The Target Simulator easily shows you an overview of components you have to work on to reach your goal. You want to achieve this primarily by increasing your gross margin to compensate for rising percentage personnel costs. In addition, an annually increasing sales will slightly reduce the percentage of other costs and depreciations, which will have a positive effect on your profitability.

Which improvements to make to close the gap?

Now, let's see which improvements you need to make on which drivers to close the above visualized gap with the top performers. In the visual below, the progression towards the desired target, EBIT of 4.0% by 2026, is mapped out. This overview gives clear insight into the changes on the main drivers, both in a positive and negative way. This enables you to proceed with concrete plans to reach your set goal. In this example, to tackle the expected increase of staff costs, the company has to improve its gross margin, other costs and depreciations.

How do your KPI targets remain realistic and substantiated?

When setting multi-year targets, it is important to do so in the perspective of your competitors so that you can 1) ensure that targets are ambitious enough and 2) also remain realistic. The Target Simulator allows you to plot your progression over the years against both the chosen "Benchmark" and individual competitors. The Performance Quadrant provides easy comparison on revenue growth and %EBIT(DA) to see clearly in a single overview when which players are outperformed. This shows you what to expect when progressing with the goals you set.

Start setting your KPI targets with the Target Simulator

Before next year begins, start setting your targets with ease by using the Target Simulator. Set targets that are realistic, yet ambitious, with which you are most likely to reach your goals.

The Target Simulator is a feature of our online tool; The Performance Monitor. We are more than happy to show you how the Target Simulator works during a personalized demo.

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