Date posted: 30/01/2023 5 min read

The power of driver-based planning

Why more businesses are focussing on the activities that directly affect results to improve performance. Brought to you by Phocas.

Judging the success of a business is usually reasonably straightforward, but understanding exactly how it kicked its goals is often more difficult.

Bottom line performance is dependent on a dizzying array of factors including sales, pricing, headcount, customer service, marketing, distribution, productivity, suppliers and many more. Their interactions are complex to say the least.

“Attributing a portion of the profits to each aspect of the business is nigh on impossible without sophisticated data analytics tools that can measure each contribution,” product expert Jordena Tibble CA says. “That’s why driver-based planning has become so essential as it allows you to allocate resources based on desired outcomes.”

By linking budgets to those activities known to influence results, the business becomes more efficient as waste is gradually eliminated. But, to be effective, the process requires a deep dive into a company’s operations to uncover areas requiring improvement.

Tibble identifies four key benefits:

  • It puts the focus on the key metrics that affect organisational success.
  • It becomes easier to adapt to changing conditions and run rolling forecasts.
  • Finance is aligned with other departments, encouraging collaboration on budgets from across the company.
  • More efficient planning becomes possible with richer, more current data at hand.

“The power of driver-based planning depends on really understanding what drivers have the biggest impact,” she says. “Only then can you create meaningful budgets that connect resources to results.”

For example, if a company can accurately plot future sales, it can ensure it has adequate inventory, distribution and raw materials, and avoid a demand gap. If it anticipates a period of falling orders, it can build in enough lead time to devise a campaign or promotion to get back on track. It also allows teams to play out different scenarios to determine which will be the most profitable.

“When a business starts to scale up, having data siloed in a number of different departments with no overview becomes problematic,” Tibble says. “Investing in tools that provide intelligence in real time means forecasts can be quickly adjusted and potential problems dealt with before they become actual problems!”

Jordena Tibble, Product Expert, PhocasPicture: Jordena Tibble CA, Product Expert, Phocas

“The power of driver-based planning depends on really understanding what drivers have the biggest impact.”
Jordena Tibble, Phocas

Becoming battle-ready

Making the switch to driver-based planning, however, requires some hard yards of preparation, Tibble warns.

“Adopting it can be challenging, especially if your business is still using outdated methods like endless spreadsheets that don’t automatically update and cause chaos when the wrong version is shared.

“If there is no macro view of data then it’s impossible to capture the detail you need at a granular level. Sometimes getting hold of up-to-date customer intelligence takes too long so opportunities are missed.”

Phocas Software’s’ budgeting and planning tools helps businesses break down silos by connecting and synchronising plans across the organisation.

“When you integrate financial and operational drivers into your budgeting process, you can understand the ripple effects that non-financial drivers can have and create a single, reliable source of real-time truth.”

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To learn how Phocas’ business planning and analytics solution can transform your business, visit