My key KPI is a recurring content series where we ask CFOs and FDs what metrics and measures they use to drive their businesses forward.
The aim is to understand how different finance professionals across a broad array of industries and sectors use data to inform their decision making.
In the latest edition of the series, AccountingWEB catches up with Michael Saunders, a FD for M&C Saatchi.
My key KPI: Project burn/capacity planning
The Saatchi Brothers are almost more mythical than real at this point. Maurice and Charles are famous (or infamous, depending on your outlook) for their ferocious business acumen and their private forays into art and politics.
Behind the famous brothers, though, are the legions of people that keep the Saatchi empire ticking along. One of these workers is Michael Saunders, a finance director at M&C Saatchi.
It’s a diverse business with its core in advertising. “We buy companies, we spin out companies, we change our business models a lot,” said Saunders. “There are lots of different companies in the UK and the core of what I look after are the advertising agencies.”
In terms of a classic KPI, Saunders explained that its cash flow and debt. That’s one he -- like countless other FDs -- monitors like a hawk, but in terms of what is unique to M&C Saatchi is project burn and/or capacity planning.
Put succinctly, burn refers to the amount of money being spent on a particular project. “Our biggest spend is freelancers and temporary resource,” Saunders said. “In terms of planning ahead, I need to know what I’m going to spend on temporary resource in two month’s time.”
“If you boil it down to a KPI it would be how over or under capacity we are over the next few months. You do it on based on utilisation. So if we’re working on a pitch at the moment, that’s an 8-month process.
“If you’ve got someone working on that project for four months, that’s just a cost to you but it’s invested cost. Even though it’s hitting your P&L as a salary expense, it’s a decision you’ve made that it’s an investment number.”