In the engineering industry, it is imperative that every step of the project is planned only after due consideration of the financial impact it would have on the organisation.
Two pillars of financial acumen relate to thinking in the language of finance and about the dynamics of profit creation. These are essential cognitive skills for engineers, but insufficient on their own.
The third pillar of financial acumen is the know-how to move the levers that positively influence financial performance. This requires clarity on the key financial measures that need to be managed (simultaneously and continuously) and the cause-effect relationships of non-financial and financial variables.
A core part of this course is the unique financial model for visualising and targeting your influence on profit and cash flow. It is called the Return on Net Operational Assets (RONOA) Model.
In this course, you will also learn about three simple yet powerful process analysis techniques for identifying opportunities to improve financial results. These will be related to the financial variables that every manager should envisage while making operational decisions.
After completing this course, you will be able to:
- Use the Return on Net Operational Assets (RONOA) model in decision making
- Better anticipate the financial effects of your proposals and decisions
- Confidently discuss the key financial variables that need to be managed
- Use practical tools to quickly identify opportunities for improvement
- Proactively take steps to positively influence profit and cash flow
Financial acumen training suite
This course is part of a training suite covering the three pillars of financial acumen. The other courses are:
There is no order to complete these courses, but completion of all three will develop a comprehensive understanding of finance.
11 October - 18 October
23 November - 30 November
This workshop will run for 2 x 2.5 hour session on the following days:
11 & 18 October, 10:00am - 12:30pm AEDT
23 & 30 November, 10:00am - 12:30pm AEDT
Registration closes three business days before each workshop.
- Explain the ROFE and RONOA financial productivity models
- Relate these models to key operational metrics and decisions
- Determine the effect of multiple small financial improvements
- Identify process variances, failure costs and wastes (muda)
- Link process problems/failures to operational financial results
Is this course for you?
This course suits engineers and project managers who seek to develop their financial acumen. Prior knowledge of accounting and finance is not required.
Topics we'll cover
A Potent Financial Model
- The Return on Funds Employed (ROFE) Model.
- Operational vs. non-operational financial measures.
- The Return on Net Operational Assets (RONOA) Model.
- Operating working capital and the operating cycle.
- One percent marginal gains rule and sensitivity analysis.
- Financial metrics ‘hidden’ within the financial models.
- Relationship of the RONOA Model to operating cash flow.
- Application of the RONOA Model in the workplace.
Practical Improvement Tools
- Effects of culture and innovation on financial performance.
- Business architecture GODS and the Business Model Canvas.
- Targeting the value chain with the SIPOC Model of a process.
- The Quote to Cash (Q2C) and Order to Cash (O2C) process.
- Process variances analysis, failure costs analysis and waste analysis.
- The effects of process failures on the RONOA Model and cash flow.
- Examples of the financial benefits of improvement projects.
- Personal opportunities to use the models and tools at work.
Geoff Rip is a learning strategy and design consultant with more than 20 years' experience in Australia and overseas. He has a Bachelor of Business Science (Hons) and an MBA degree, and he specialises in organisation development.
Geoff has designed and delivered financial acumen courses for Australian organisations across all business sectors, including many blue-chip commercial companies. His programs help non-financial staff at all levels quickly and easily learn the financial fundamentals using specifically developed models.
Geoff is an engaging facilitator who believes that learning should be stimulating and enjoyable.