A business driver is a component, condition, process, resource or rationale (ideally measurable) that is vital for a business to continue thriving, i.e. it is something that has a major impact on the performance of a business.
It may also be a situation which would improve a company’s financial health. For example, a business driver to improve the sales of a shoe shop in a shopping mall might be to reduce the percentage of customers who enter and then leave without buying anything.
Businesses should identify their business drivers and try to maximize any that are under their control.
A company’s strategy and goals are dependent on the business drivers it identifies, and their perceived order of importance.
The image shows the top 10 business drivers for the oil & gas industry for 2015, according to experts. (See video below)
Some business drivers are beyond our control
Some drivers must be accepted as necessary evils which we are unable to influence, such as trade relations with other countries, the price of raw materials, geopolitical unrest, or economic conditions.
Identifying a company’s business drivers gets harder as it becomes more complex. Several software makers have created programs that help firm’s clarify and track their business drivers.
The term business driver has become a fashionable catchphrase that refers to any key part of a business. For software companies, their business drivers will be technological innovation, better products, optimum marketing and first class customer support.
The most common business drivers are:
– legislation and government policy
– the price of resources or commodities
– competitors’ activities
– customer demand
Internal and external business drivers
Examples of internal drivers are the personnel and the different departments within a business that contribute to product sales, marketing, production, and development.
The sales personnel, for example, drum up demand for a product and work to make sure the company’s goods are delivered on time.
A business’ internal drivers support its work and generally have a common goal, such as aiming for a percentage market share for a specific product. Market share refers to a company’s sales relative to the size of the whole industry.
Examples of external drivers include customers, the economy, competitors, and regulatory agencies.
Drivers that influence sales may be the number of calls people make, the company’s follow-up service campaign, or how many visitors come to its website – the drivers that help generate sales.
Key drivers are not the same in all industries. In a law firm, for example, thoroughness is much more important than speed of delivery. For a pizza delivery service, however, speed is king.
According to BisShifts-Trends, business drivers are:
“Critically important factors that determine, or cause, an increase in value or major improvement of a business… business driver is a resource, process or condition that is vital for the continued success and growth of a business.”
Video – Oil & Gas business drivers
This video looks at the top 10 oil & gas business drivers that will influence the market in 2015.