Value based management (VBM) can help managers make decisions in the context of the financial
objectives of the company and the expectations of the shareholders.
Managers need to have an understanding of their key value drivers, which can be intangible assets,
the financial structure, asset turns and working capital. Each requires a different type of focus
and management attention.
Strategic decisions at the senior level have to be linked to the value drivers used by frontline
managers and employees.
As organisations seek to involve more people in VBM approaches and ensure they are aligned to
the corporate objectives, a larger scale implementation that can be updated and used more
frequently will be needed.
SAS software can be used to enhance the effectiveness of a VBM implementation by providing
better analysis and predictive capabilities and aiding communication within the company and with
SAS software can be used to implement VBM in the following ways:
Strategy mapping: business drivers that affect shareholder value can be mapped to show the
links between each and what can be done to improve them.
Alignment: ensure the goals cascaded throughout the organisation are in line with the
overall corporate objectives, and that there is top to bottom alignment of activities.
Internal communication: the strategic vision and long term corporate goals can be shared
with all employees through the Web. Performance reporting can be updated automatically and
delivered to the desktop.
Measurements: measures can be summed and amalgamated, target and actual data can be
collected and reported automatically, and early indicators of variance can be displayed.
Appropriate VBM drivers can be linked to each metric.
Investor communication: disclosure of relevant information, the goal being to avoid
unnecessary surprises and minimise the uncertainty. Top level views can give management an
overall view of VBM performance.
Continuous improvement: highlight key areas that need improvement through drill down and
analysis, correlation of drivers with outcomes and personalised information portals.