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IFRS and EVM, a comparison

The program “IFRS and EVM, a comparison” will get you there

Moving from 'Learning' to solving a 'Real Business Issue'

Focus on solving a business issue

Learning returns the highest benefit when it is properly applied to solving real business problems. We recommend the line manager and the employee agree on measurable goals that will address known business issues.

The employee might then need to attend a development program such as this workshop. The objective is not just to attend a workshop, but rather to increase the employee’s business and financial acumen, and as a direct result of this development program, identify and help achieve specific, measurable, value-creating performance goals. To illustrate moving from learning-related goals to performance-related goals, we have prepared the following suggestions, which of course should be modified to meet the specific needs of the line manager and employee.

A business issue is on the table
Manager asks employee to solve the business issue
Training takes place with the issue in mind
Employee focuses on solving the issue
Employee reports outcome

  • Issue needs to be solved asap
  • Employee is unclear how to do that
  • Definition of KPIs to solve the issue
  • Training will be recommended to help solve the issue
  • Maybe a workshop
  • Maybe on-line
  • Employee addresses the issue with the newly acquainted knowledge
  • Employee shares how it was possible to meet the KPIs
  • Issue is solved

Value creating performance

Value-Creating Goal

Once you have gained new knowledge on the workings of the IFRS 17 accounting standard, you will be able to do research in establishing the impact of IFRS 17 on EVM, for both Swiss Re legal entities and clients across the globe. Once you have completed this research, you can present five key findings to your line manager, with the aim of attempting to shape the business plan of your unit.

(It is recommended that you also attend the Introduction IFRS workshop before completing this task.)

Suggested application tasks in order to meet the above-mentioned goal

After reviewing the financial statements Swiss Re and the impact of the new IFRS 17, you can now demonstrate this increased knowledge by preparing a two short presentations for your line manager.

  • The first presentation: analyze how IFRS17 would affect the financial reporting on a pending (or already implemented) transaction and discuss five findings with your line manager and then discuss the potential impact on the business plan of your unit.
  • The second presentation: present the findings after comparing EVM with IFRS17 accounting and other approaches to financial analysis, summarize the impact on reporting for Swiss Re and the consequences for clients.

Summary

Addressing business issues - in a context of learning - promises to produce impressive ROIs.

When we consider all the benefits and costs, this type of training/development investment creates significant value and provides impressive quantifiable returns, both for the employee and for Swiss Re. Therefore, this approach moves us far beyond "just learning something"; it focuses us on the positive business outcomes by quantifying the expected costs and resulting value creation.

Our Thoughts – the Return on Investment (ROI) Calculation

This activity promises a strong ROI of 147%

The sections below reveal our calculation.

Select each thought (+) to learn more about it.

Quantifiable value: Should your input shape the business strategy of your teams unit and potentially increase the likelihood of executing the business plan, the value could exceed 1% of the portfolio. Assume the estimated value of the portfolio to greater than US$500,000, with a 50% probability of successful execution.

The value therefore can be calculated this way: US$500,000 x 1% x 50%, which equates to US$2,500 in benefit.

Non-quantifiable value: Besides this measurable value, there are also non-quantitative benefits of this development. These include for example differentiating from competitors and being ahead of the game, value of enhancing finance competencies of the employee, as well as the enhancement of work quality, which often materializes over time.

Assume the cost of participating in the half-day workshop is US$300 which is the Swiss Re average cost.

Also assume the opportunity cost for being away from the desk for half a day is US$700. Further assume half a day of work is required to apply the findings and to achieve the above-mentioned performance goal, which adds an additional US$700 opportunity cost for not being productive.

Therefore, the total related cost of this learning investment is assumed to be US$1,700 (US$300 + US$700 + US$700).

The ROI in this case equates to a high 147% (US$2,500/US$1,700).

Don’t forget this ROI calculation is not considering the above-mentioned non-quantifiable value.

Additional savings could result since the savings could reoccur in subsequent years and the learnings from the workshop could be applied to other situations. In your own individual case, the numbers may differ, our intention here is to offer an example for creating your own ROI calculations.
Agree on your goal
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