Operational Plan Variance
How do we best support, coordinate, and manage the delivery of meaningful plans?
Once Finance understands the why behind performance variances, it must leverage this knowledge to re-evaluate and improve future operating plans. Finance should offer input and feedback to guide other business areas. These business areas, in turn, provide frontline information to Finance. This coordinated effort allows your organization to test and develop more predictable and reality-based business plans for better performance.
With the Operational Plan Variance decision area, you can set planning goals and scorecarding metrics for performance management elements such as:
- Operating and overhead cost variance ($ and %)
- Product cost / sales ratio (%)
- Actual versus plan (%)
- Average unit cost ($)
- Distribution, labor, marketing, overhead, and production costs ($ and %)
- Sales per employee ($).
- SG&A ($ and %)
You can analyze these goals and metrics by a number of dimensions to find opportunities and challenges in the data:
- Fiscal month / year
- General ledger lines
- Division / department
- Brand and Product line.
Using the Operational Plan Variance area
You set targets based on your goals and metrics in Operational Plan Variance. You monitor your success by looking at how you measure up against your targets. Further, you dive into your results to find out more about these elements driving performance management.
- Operating cost variance ($ and %) : Which account types have contributed the most to over-budget variances?
- Actual versus plan (%) : Did we achieve our store upgrade objectives?
- Overhead costs ($) : How do our overhead and production costs compare with last year?
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