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Does anyone have a definition for "Driver-Based Planning"?
As a conference presenter, I am often asked to define my terms when making formal presentations on the topic of driver-based planning. Hey, if I'm a self-proclaimed thought leader on driver-based planning, shouldn't I have a definition from which to begin the conversation?
However, when I google "driver-based planning," I did not find a single definition...
So, I find myself turning to the Focus Expert Community!
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1 Answer
Hard to respond without using the word 'driver' in the definition. In short, I'd suggest driver-based planning starts with finding the root cause for revenues and expenses which are then called drivers. Building a plan around drivers focuses on the heart and core of what a business does.
One of my favorite clients is a global leader in e-commerce within their industry. While the business has some complexities, our main driver is orders (we could dig deeper and find drivers that drive orders ... the marketing people do, but at the C-level, orders are the key driver).
So in this instance, orders 'drive' our revenue dollars, much of our direct labor, freight costs, our call center, and a few other costs. A few other activities/drivers drive our planning process as well which we do monthly.
So in short, I'd call it the process of planning based on the key activities that drive revenue, gross margins, NOI, and cash flow.
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