Definition

driver-based planning

Driver-based planning is an approach to management that identifies an organization's key business drivers and creates a series of business plans that mathematically model how those things most necessary for the organization's success would be affected by different variables.

The goal of driver-based planning is to focus business plans upon the criteria that are most capable of driving success. Identifying those key business drivers can be tricky if done in a subjective manner, however, and individuals within the same organization may have very different perceptions about what the key drivers for success are. This is why forecasting business drivers objectively through a mathematical model can be helpful. The models may be created with spreadsheets or with more advanced data modeling software applications. 

The concept of driver-based planning was used to great effect in the movie MoneyBall. The film, which was based on a book by Michael Lewis, illustrated how a Major League Baseball team's assistant general manager used statistical analysis to identify the organization's key drivers for success. The analysis, which clearly showed that on-base percentage should be a key driver for player selection, changed the way the team's general manager approached planning and allowed his team to successfully compete against other teams with more financial resources.

See also: corporate performance management, Cognos, descriptive modeling, predictive modeling

This was last updated in April 2014
Posted by: Margaret Rouse

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