Trade-offs

Quality vs cost

Sales vs Margins

Short-term vs Long-term

Make vs Buy

Capex vs Opex

Rapid innovation and intense competition have created a business environment where trade-offs are now unavoidable.

Whether it is a financial trade-off such as prioritizing sales vs margins or an operational trade-off such as make vs buy, managers now have to make significant decisions on a routine basis.

Unfortunately, most managers lack the analytics and insights needed to make informed decisions. The result is often sub-optimal performance leading to lower profits, cash flow issues and missed opportunities.

Problem:

Solution:

Our Strategic Finance consulting services are grounded in the Value Based Management (VBM) framework that recognizes Enterprise Value as the overarching metric for managerial decision making and resolution of trade-offs.

VBM is not just another planning methodology; it is a value-driven mindset which when coupled with the right processes and systems elevates your business to a whole new level.

Are you ready to elevate your organization to a whole new level?

Our Framework

Our Advantage

Traditional Methods:

Traditional planning methods employ accounting based performance metrics such as net income or operating profit. Unfortunately, these metrics are not good proxies for measuring value creation due to several reasons.

They are accounting based and don't reflect true cashflow generation

They are short-term focused which can cause myopia and lead to missed opportunities

They don't take into account cost of capital and can lead to inefficient resource allocation

Telang Consulting Approach:

This plan is then translated into an Economic Value Added (EVA) metric at the highest level of the organization.

Our value based planning framework starts with a long term strategic plan for value maximization.

The EVA then cascades down the pyramid to define value drivers at each level. These can be financial as well as non-financial in nature.

Specific targets and action plans are generated for each of the value drivers and assigned to employees.

Value drivers identification and target setting are both carried out to match the employee's job profile.

Unlike traditional planning, our approach supports both financial and operational value drivers. Also, we support both short term and long term focused drivers such as customer satisfaction levels and customer lifetime value.

Our approach supports value based metrics such as EVA which is well suited for capturing value from strategic growth and large scale transformation projects. By incorporating a finance charge, it more accurately captures excess return generated, thus promoting prudent capital investments.

Our approach starts with value drivers at the top and then cascades down the organization pyramid to lower level KPIs for functional managers. This process ensures alignment in performance targets at all levels.

VBM zeros in on sources of value creation throughout the organization and provides insights into true competitive advantages that cannot be easily duplicated. This allows the firm to perform at its peak regardless of how the external environment shifts.

Drawbacks

Benefits to Clients: Trade-offs Resolution