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A leading food and beverage company wanted to develop its financial steering practices to better understand how its invested capital generated growth and profits.
Return on Capital Employed (ROCE) was considered a suitable metric for this purpose, but before its implementation, the calculation logic needed to be defined and tested.
August was brought in to 1) crystallize the ROCE calculation logic, 2) test it in practice with real data, and 3) define steering practices to cascade ROCE targets and to follow-up actual ROCE performance across the organization:
As an outcome, the client company has now better transparency to its overall capital efficiency and how individual businesses are generating value with the capital invested in them. The company is also now better equipped to cascade responsibility over ROCE’s elements into the organization to further improve capital efficiency.
Furthermore, the project provided useful specifications for the on-going ERP development work (e.g. data needs for continuous ROCE reporting).