{"id":4588,"date":"2019-03-20T06:54:58","date_gmt":"2019-03-20T11:54:58","guid":{"rendered":"http:\/\/flevy.com\/blog\/?p=4588"},"modified":"2020-12-20T22:48:38","modified_gmt":"2020-12-21T03:48:38","slug":"strategy-and-finance-alignment-the-key-to-optimizing-target-operating-model","status":"publish","type":"post","link":"https:\/\/flevy.com\/blog\/strategy-and-finance-alignment-the-key-to-optimizing-target-operating-model\/","title":{"rendered":"Strategy and Finance Alignment: The Key to Optimizing Target Operating Model"},"content":{"rendered":"

Industries today are in a state of flux driven by volatile market forces. Although every company devises a strategy for creating long-\"\"term differentiation for goods and services, still various dynamics are emerging.<\/p>\n

Across industries, market changes are affecting how Finance needs to operate. Finance must anticipate the implication of these various dynamics and forces evolving in the global economy.\u00a0 These various forces are now pushing the corporation to align its Finance with its Strategy.\u00a0 In effect, an optimal Target Operating Model<\/a> is created as a result of aligning Corporate Finance<\/a> and corporate priorities.<\/p>\n

Conquering Market Volatility through Strategy and Finance<\/strong><\/h2>\n

Strategy and Finance<\/a> are strategic priorities that are essential to conquering market volatility in today\u2019s global economy. \u00a0We are now encountering volatile market forces that are affecting global trends. There is the rising affluence of middle classes in emerging markets, rising risk profiles in individual markets.\u00a0 Market consolidation is being pursued and there is now a dramatic shift in consumption patterns and the emergence of consumer power.<\/p>\n

The changing market forces have pushed Finance to strategic directions. In the face of all these global trends, Finance is increasingly being streamlined and is leveraging provider\u2019s technology, investment, and global scale. Finance is evolving from a purely transactional activity to strategic.<\/p>\n

Finance organizations are rapidly realigning talent to emerging corporate priorities to improve business partnerships.\u00a0 When Finance simultaneously develops and strengthens new skills and systematically measures, dissects, and resolves operational issues, then true gains are realized.<\/p>\n

The 5 Key Elements of Governance<\/strong><\/h2>\n

Finance can strategically respond to changing operational requirements.\u00a0 But an operating model is required that supports the strategic alignment of both Strategy and Finance. This can be done with the application of the 5 key elements of Governance<\/a>.<\/p>\n

\"\"<\/a><\/p>\n

    \n
  1. The right configuration.<\/strong> When there is a right configuration, a clear decision-making hierarchy exists that allows monitoring of performance and issuing of resolutions.<\/li>\n<\/ol>\n
      \n
    1. The right mandate.<\/strong> With the right mandate, governance teams are empowered to act on issues that they oversee. There is ownership of plans that incorporate processes, policies, and technology changes globally.<\/li>\n<\/ol>\n
        \n
      1. The right metrics.\u00a0<\/strong>The right metrics is the key element that establishes the standards of measure in terms of performance. It can effectively govern performance.<\/li>\n<\/ol>\n
          \n
        1. The right tools.\u00a0<\/strong>Investment in the right tools can lead organizations to continuously gather enhanced insights into performance.\u00a0 \u00a0Leaders can effectively visualize performance and analyze root causes with the use of these tools.<\/li>\n<\/ol>\n
            \n
          1. The right people.\u00a0<\/strong>An efficient process is ensured not only with the right tools but also with the right people.\u00a0 With the right people, globally distributed process teams are formed and joint decisions are created with clear responsibility assignment matrices.<\/li>\n<\/ol>\n

            Communicating the Strategy<\/strong><\/h2>\n

            Communicating the strategy is often a neglected pillar of the overall plan.\u00a0\u00a0 The strategy\u2019s vision and pace must be conveyed to all members of the organization. When this is done, it keeps troops aligned thus enabling leadership to focus on other dimensions of the Target Operating Model.<\/p>\n

            Interested in gaining more understanding of Strategy and Finance Alignment<\/a>? You can learn more and download an editable PowerPoint about Strategy and Finance Alignment<\/strong> here<\/u> <\/a>on the Flevy documents marketplace<\/a><\/u>.<\/p>\n

            Do You Find Value in This Framework?<\/h2>\n

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            “Several times a month, I browse FlevyPro for presentations relevant to the job challenge I have (I am a consultant). When the subject requires it, I explore further and buy from the Flevy Marketplace. On all occasions, I read them, analyze them. I take the most relevant and applicable ideas for my work; and, of course, all this translates to my and my clients’ benefits.”<\/p>\n

            \u2013 Omar Hern\u00e1n Montes Parra, CEO at Quantum SFE<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

            Industries today are in a state of flux driven by volatile market forces. Although every company devises a strategy for creating long-term differentiation for goods and services, still various dynamics are emerging. Across industries, market changes are affecting how Finance needs to operate. Finance must anticipate the implication of these various dynamics and forces evolving… Strategy and Finance Alignment: The Key to Optimizing Target Operating Model<\/span><\/a><\/p>\n","protected":false},"author":111,"featured_media":4589,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[85,81],"tags":[1509,1508],"class_list":["post-4588","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-organization","category-strategy","tag-strategy-and-finance","tag-target-operating-model"],"_links":{"self":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/4588","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/users\/111"}],"replies":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/comments?post=4588"}],"version-history":[{"count":7,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/4588\/revisions"}],"predecessor-version":[{"id":8175,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/4588\/revisions\/8175"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media\/4589"}],"wp:attachment":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media?parent=4588"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/categories?post=4588"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/tags?post=4588"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}