Are you aspiring to become a Certified Management Accountant (CMA) and looking to enhance your skills in financial management and planning? In this article, we will explore how operational strategies generate reliable forecasts making you a performing CMA.
What Are Operational Strategies?
An operational strategy involves a set of decisions that guide the long-term capabilities and contributions of an organization toward achieving its general corporate strategy. These decisions should align with both short and long-term goals, aiding the implementation of effective and lasting business strategies.
Specifically, customer-driven operational strategies work on identifying and updating consumer markets from the outside in. In other words, the products and/or services developed by a company are based on the consumer’s preferences and behaviors rather than the internal actor’s desires or intuitions.
Accordingly, building an effective customer-driven operational strategy is at the heart of any company aiming to generate reliable forecasts, thus building financial stability.
What does an operational strategy require, and who has the expertise to build and implement it?
Here are 5 crucial steps to any effective operational strategy!
5 Crucial Steps to Any Effective Operational Strategy
1- Data Analysis
We can’t but stress this primary step!
The ability to analyze and interpret thorough data is a fundamental step in any operational strategy aiming to generate reliable forecasts. From the same token, CMAs are expected to excel in analyzing financial data, identifying trends, and making informed predictions based on quantitative insights.
2- Scenario Planning
Now the data is analyzed, it’s time to have it contextualized!
Building scenario plans is one of the ways to account for uncertainties when building or following an operational strategy. From new, growing, degrading or at-risk markets, scenario plans contextualize the previously analyzed data ensuring management bases their decisions on customer-centric revenue predictions. Effective risk management is a core competency of CMAs, making them the go-to hires for companies willing to take risks all while ensuring financial stability to their organizations.
3- Cross-functional Collaboration
Because teamwork makes the dream work!
Collaboration between finance, strategy, marketing, and other departments is crucial for accurate forecasting. With that purpose in mind, CMAs work closely with various teams to gather relevant data and insights, making them the best fit for operational strategy building and implementation.
4- Continuous Improvement
But, how not to jump to conclusions?
While analyzing and contextualizing customer data is essential to any operational strategy, if not properly conducted, falsified assumptions can be made over irrelevant or outdated information. CMAs, however, embrace a continuous learning mindset and are committed to ongoing improvement in forecasting strategies as evidenced by the CMA certification's requirement to stay current with industry trends.
The tying knot!
What’s the purpose of analyzing, planning, improving, and collaborating if the communication is refracted? In fact, the tying knot of any operational strategy is how effectively its actors communicate, and with its absence, all steps fail and fall short. CMAs are trained and equipped with excellent communication skills capable of communicating financial information to stakeholders in a comprehensible and jargon-free manner, thus optimizing the decision-making process.
Incorporating the previously outlined operational strategies into your skill set not only enhances your forecasting abilities but also aligns seamlessly with the competencies expected of a CMA. By mastering these strategies, you can confidently navigate the challenges of financial management, contributing effectively to your organization's success and your personal growth as a CMA!