Introduction and challenges
Nowadays, building the strategic plan is an essential exercise for any enterprise. The CEO needs a financial and operational management structure to assess the progress of the implementation of the strategic plan and to measure its financial impact. The CFO, as guardian of the enterprise’s management and financial performance, is responsible for overseeing this structure on behalf of the CEO and the shareholders.
The development of this steering structure presents two main challenges for the CFO. Firstly, it is a matter of modelling the strategic plan, highlighting the most relevant operational and financial levers to achieve the strategic objectives and defining KPIs to measure their progress. Secondly, the CFO must define and implement the steering process, and setup and support a strong governance structure in order to make the many stakeholders accountable and to ensure effective communication of results.
How we can help
Argon & Co has a proven methodology for modelling strategic plans and assisting the CEO and CFO in the development and implementation of the appropriate system, particularly through analytics platform solutions.
- Modelling the strategic plan
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- Design of a “Financial Tree” – a tree model of operational and financial levers based on defined strategic objectives; for example, an increase in return on capital employed of 3%, a free cash flow representing 8% of revenue and a dividend representing 20% of net income
- Shortlisting the most relevant levers (e.g. intensity of impact, feasibility, time to implement) and associated KPIs
- Deriving sub-objectives at different levels of the organisation (e. g. BUs, functional departments)
- Building the steering structure
- Development of the strategic plan dashboard
- Implementation of a dynamic and visual dashboard on an analytics platform solution
- Definition of the governance model and preparation of a communication plan (e.g. internal and external communication rules, announcement of objectives, sharing of results)
- Alignment of individual objectives with that of the strategic plan