Restructuring For Sustainable Growth and Profitablity
In the earlier sustainable EPM post, we established that Revenue Growth and Sustainable profitability are two main metrics that companies continue to constantly measure and try to improve. Restructuring or Re-Org is a common method that Executives use to accomplish better optimization and efficient use of internal resources, eventually to achieve better profitability.
In a research done by Mckinsey, companies that have similar sized business units seem to outperform peers both in terms of growth as well as profitability. It looks pretty intuitive in one way, given the fact that in larger companies, each business units generally tend to operate in siloed fashion – more similar they are in size, more synergy would be possible at leadership level for effective cross utilization of overall resources
Restructuring is hard and even more so is in measuring the efficacy of restructures. A solid EPM foundation is required to understand the impact of structural changes on business performance. For example, we could selling the same product for 10 years but it could have been sold by 10 different teams under different structures – identifying what structure was most effective requires a solid EPM foundation. QuarkCube provides a solid metadata management platform including historical tracking of metadata to drive better business performance.
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