Financial Leaders are building predictive models and scenario analysis capabilities to sense the impact of the volatile environment. By leaning into more agile, data-driven scenario planning, they can model the potential effects of market risks. CFOs also could play an active role in driving business growth.

River Logic helps Finance Leaders to achieve 5 goals through end-to-end financial optimization.

1. Improve Forecast Accuracy and Risk Resiliency.

Given rising interest rates and unpredictable costs, finance leaders are seeking safe options for more flexibility in operations. Holding excess cash is critical to enabling organic growth investments in this context. Finance leaders need reliable tools for Forecast Accuracy to improve Cash Flow position. The ability to estimate with precision how a business will perform in the future should be powered by technology that includes not only complete financials but also all the interdependencies of the end-to-end value chain, adaptable to a company’s unique constraints for a more robust and realistic assessment and forecast. 

A truly end-to-end scope would include not only the full value chain but also the product portfolio, sustainability objectives, and the financial impact of profitability and ability to finance the operation. Understanding transfer prices, taxes, tariffs, and offsets are critical for end-to-end optimization and determining any initiative’s real financial impact.

River Logic’s Digital Planning Twin^TM enables profit improvement, from cost transformation to margin-based optimization, to identify cost savings without sacrificing profit, and creates a GAAP-compliant ROI roadmap that aligns with the client’s operational and financial leadership.

2. Drive Profitable Growth in Leaner Times  

Strategic decisions require a process that combines the ability to analyze complex variables and evaluate scenarios for data-driven decision-making. In the current environment, CFOs must lead strategic discussions and drive business agility through collaboration with other leaders as COOs, CSCOs, or CROs to create new pricing structures, streamline supplier relationships, identify supply chain improvements to drive revenue, and quantify areas of risk across the enterprise.  

River Logic’s Digital Planning Twin^TM is an advanced platform that provides an easy and fast way to visualize and interact with a company’s value chain. It helps solve complex, cross-functional decisions to optimize key objectives like growth.

Key decisions:

3. Deliver Value through Margin Transformation 

Margin Transformation delivers significantly higher value than Cost Optimization, while providing real insights into a company’s key performance drivers. Cost Optimization is a blunt tool, often causing more damage than benefits and never reaching the optimal state.  It requires more than Cost Optimization Initiatives to address disruption and thrive in volatile environments. ​

As we head into a recessionary period, firms that manage margin and balance sheet items deliver up to 50% higher shareholder returns.  Finance leaders have a unique opportunity to drive Margin Transformation.​

A truly end-to-end scope would include not only the entire value chain but also the product portfolio, sustainability objectives, and the financial impact of profitability, margin, and ability to finance the operation. ​

Understanding demand at a deeper level, as well as transfer prices and financial constraints, are critical for end-to-end optimization to quantify and maximize any initiative’s real financial impact and drive Margin Transformation. ​

 Typical Value from Margin Transformation:

4. Increase Capital Efficiency

Gain flexibility for growth investments by fine-tuning the capital allocation strategy to address changing conditions in the cost of capital and asset valuations.

River Logic’s Digital Planning Twin^TM  helps decision makers in finance to conduct “What If Scenarios” to model how investment choices will impact business objectives. Some scenarios include: 

• Identify investments with higher returns and strategic alignment given organizational constraints.
• Trade-offs between CAPEX/OPEX.
• Transfer Price Optimization
• NVP Analysis and Configuration    
• Manage capital allocation across all levels of the organization (BU/regional/corporate)
• Risk and Return assessments of capital projects and portfolios.

5. Act on ESG

Many companies are concentrating their ESG efforts on gathering data and creating consistent reporting metrics in preparation for SEC’s forthcoming disclosure rules. Financial leaders can take an active role in shaping policies and procedures for climate data collection. Still, they can also look to drive execution in how their companies can make progress on decarbonization efforts.

River Logic helps business leaders in every stage of their sustainability journey, both in setting the target and driving execution companies need to tie into scopes 1, 2, and 3.