Are we managing long-term assets effectively to increase future revenue and expense management capabilities?
Decisions in this area are Executive Management's opportunity to influence the future direction and successful performance management of the business. This is where the right investment choice can fundamentally redefine both the revenue opportunities and cost efficiencies of an organization.
Executive Management looks at these four areas for better Long-term Assets Management:
Strategic Investment ROI (%)
These decision areas, drawn from across departments, bring strategic investment ROI information to the fore.
By making strategic investments a dedicated sweet spot, Executive Management can monitor investment performance and rationale for a decision.
Acquisitions fail in financial terms due to overpaying for the target or poor execution when consolidating the business.
With Executive Management well informed by past acquisitions of the key factors that influence success or failure, you reduce the risks for the future.
Staff productivity index
Decision areas from across various departments bring information about staff productivity to your attention.
A basic assessment reveals headcount and sales per employee by department, but there can be many added levels of sophistication in this tracking.
If this indicator increases, implying improved staff productivity, Executive Management should look at how to sustain it.
You may have seen an associated increase in training and development expenditures due to the new project, but the result directly improves the staff productivity index. With these figures, Executive Management can push for a review of plans and have other functions record the impact in operational plan variance.
IT ROA (%)
These decision areas from across departments provide return on asset information for Information Technology.
Sudden technology shifts can upend the business model, so Executive Management must know where and how IT assets are driving value across different business units, lines of business and functions.
Comparing the upward or downward trend in IT ROA with current financial and operational results lets you see potential weaknesses in IT strategy.
Likewise, comparisons with staff productivity and strategic investment percentages highlight the level of alignment with long-term business goals.
Employee retention (%)
Decision areas from across departments let you track employee retention as an executive manager.
Retaining employees saves money on recruitment and start-up costs; keeping the right employees builds one of your most important assets.
The talent and succession review decision area provides additional information for Executive Management, making it aware that new people and talent are necessary to improve the capability of the business.
Designing a blend of internal career advancement and strategic recruiting of new talent is an Executive Management priority.
