KPI-based performance management for innovative software portfolio development in medical engineering

Purpose The medical technology sector is undergoing rapid innovation and increasing competitive pressure, particularly in software-based solutions such as medical imaging analytics. Despite their strategic relevance, software portfolio elements remain underrepresented in economic statistics and management frameworks due to their intangible nature and evolution into service-oriented models.The complexity of software development, involving multiple interfaces and stakeholders, raises inefficiency risks, especially in large matrix organizations. Although Key Performance Indicators (KPIs) can help identify inefficiencies, selecting appropriate KPIs and designing effective frameworks that enhance portfolio management, development processes, and stakeholder acceptance remains challenging. Their systematic application to software portfolios, particularly in medical engineering, is still underexplored. Methods This study develops and evaluates a KPI-driven controlling framework and dashboard for innovative software portfolios in the medical engineering industry. Using a design science research approach, the dashboard was conceptualized, implemented, and validated in an industrial setting over two years, combining business data with stakeholder surveys and dashboard usage data. To determine the KPIs a nine-year software business dataset of a medical engineering company was analysed. Following the introduction of the dashboard, observed trends in financial and non-financial indicators show positive performance. Results Findings indicate that KPI-based controlling enhances transparency and strategic alignment. Financial results over two years include revenue growth of approximately 13% and profitability increases of 16%. Non-financials, such as a 3.7% rise in System Software Attach Rate and improved stakeholder feedback, suggest that, that KPIs support decision-making and cross-departmental collaboration through spillover effects. Conclusion Overall, the implementation of KPI-based controlling was associated with positive financial and organizational performance trends in the studied software portfolio.