Identify the criteria that actually drive your numbers
Driver-based planning involves creating budgets and forecasts based on the drivers behind the end result. This takes planning beyond the simple income statement and focuses on identifying the criteria that actually drive your numbers up and down. In other words, the real underlying drivers of success. Whether it is the number of units, measurements, quantities, frequency.
As an example:
A number of units produced multiplied by x price = revenue or a number of customer visits, multiplied by x conversion rate, and x contract sum = revenue.
Once a selection of drivers is established, we can create models that allow you to test how they will be affected by different variables. This way, you can effectively model “what if” scenarios, simulate different versions of the future, and at the same time be able to measure your results with far greater accuracy towards the plan.
- Focus on resources to create profitability
- Identifies the exact reasons why you do not achieve your goals
- Engages department leaders in improving performance
- Enables detailed scenario planning for quick reaction to changing conditions
Let’s find out what lies behind the results.