Driver-based refers to variables that drive key results. The planning component of driver-based planning entails building models that forecast where an organization is headed based on the information at hand. Driver-based planning is an approach that bases financial forecasts on operational drivers to support organizational performance management.
The main goal of driver-based models is to answer questions such as what happens to key financial outcomes including revenue growth, operating margins and cashflow in a given set of driver values.
Focusing on key operational activities that drive results allow businesses to be more agile and adaptive to change. More and more, driver-based planning has become a key contributor for maintaining an organization’s competitive edge.
Driver-based planning empowers business to thoroughly test business inferences to measure the probability of specific operational plans. By doing this, organizations are more easily able to incorporate the proper level of resources to achieve the desired financial outcomes.