The Purpose-Driven CFO and Much More!
This article is written by financial modelling specialist, Lance Rubin. You can find more of Lance's work at https://www.modelcitizn.com/
When I first came across the term driver based planning and forecasting I was confused.
As an ex-investment banker having joined a Finance team the concept of drivers when talking about a forecast or plan was simply assumptions.
Why was it not called just that? Assumptions! Investment bankers have been building models with assumptions ever since the first model was built and a corporate transaction was negotiated.
So what’s all the excitement about driver based planning. It’s simply a financial model with assumptions to drive decisions..no?
Why give assumptions a different name i.e. a driver, why not just call it assumption based planning?
Ultimately a plan or a forecast is a collection of assumptions both in the numbers that are input into the model but also assumptions around...
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