Operational Performance Management

The essence of the partnership between operational finance and expertise

The level of operational performance is the result of selling prices, the optimization of production factors, the use of available resources, structural cost control and optimization, as well as the quality of products and services sold to customers. Operational performance management is a key factor in successfully achieving the targets of a business plan. It is an issue for the board.

Context and challenges

Operational performance management must be performed across the entire value chain. It should enable the following questions to be answered:

  • Do sales forces have enough power to pursue the right opportunities to meet strategic targets?   
    • Do they have the right territorial approach?
    • Are accounts being managed effectively?
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  • How are our prices evolving compared to the competition?
    • For each product, service type, sector, customer, offer?   
    • What are the reasons for these differences?
  • Why do our direct margins vary?   
    • Are the variations related to the use of resources or production factors, the price of commodities, the exchange rate, sales price fluctuations, or volumes?
    • Are they due to a delivery problem or a pre-sale problem?   
    • Which functions are involved in the pre-sale phases?
  • Is the right level of operational support available compared to other group Business Units (BU) and competitors?
    • Is it possible to be more effective?   
    • And cheaper?

Creating the right operational performance management system does not just mean creating dashboards.

 

How can Argon Consulting help you?

  • Creation of a 'Financial Tree' diagram, setting out the operating margin for the volume and price of production factors, utilization ratio, production units, sales volumes, prices, etc.
  • Definition of performance indicators that reflect the elements contributing to performance. These indicators have to be measurable
  • Identification of efficiency levers for each function, which contribute to performance
  • Optimization of the pre-sales process. The Finance function must play an important role in managing pricing, calculating the margin, identifying and valuing the risks, and, lastly, forecasting cash generation
  • Specification of lean dashboards, which make it possible to deploy and measure identified performance targets