Applying the Vision, Strategy, and Execution Framework to COGS
Attivo’s Vision Strategy Execution Framework was developed to help translate financial reporting into operational influence. When applied to COGS, it provides a structure for evaluating how costs are created, how they scale, and where they can be optimized without compromising delivery.
COGS reflects the cumulative impact of decisions about infrastructure, staffing, systems, and delivery. It affects how the business scales and how investors perceive that scalability. Applying the VSE framework ensures that COGS modeling isn’t just accurate—it’s actionable.
Vision
Establishing a clear margin target is the first step in aligning financial goals with operational strategy. What gross margin are we targeting—and how does that compare to best-in-class benchmarks in our category?
Whether it’s 85% for a SaaS platform or 50% for a product company, that target becomes a reference point for financial modeling, operational planning, and investor conversations.
Strategy
How can we structure operations, systems, and delivery models to achieve those targets? Strategic margin planning requires proactive design, not just reactive cost control. That means examining staffing models, tooling, infrastructure usage, and cost capitalization. Finance teams must collaborate cross-functionally to shape how delivery happens at scale. Key questions include:
- Can we shift implementation or support functions to scalable, automated workflows?
- Are we optimizing infrastructure?
- Can we delineate development and production environments and clearly identify the services and tooling that support these environments?
Well-structured COGS models don’t just reveal costs—they uncover opportunities.
Well-structured COGS models don’t just reveal costs—they uncover opportunities.
Execution is where modeling discipline and operational clarity intersect. The strategic decisions made upstream only deliver results if they are implemented effectively and tracked accurately. Finance teams must ensure consistency in how costs are captured, categorized, and reflected in the model, particularly in areas where delivery spans multiple departments or systems. Some common focus areas for early-stage startups include:
- Segmenting development and production cloud/hosting/inference spend through tagging, tooling, or contract structure
- Identifying tools that support the customer facing platform vs internal data services
- Allocating labor accurately, especially in hybrid roles that straddle COGS and OPEX
Each decision layer—vision, strategy, and execution—has financial and operational implications. Owning those details is what enables finance teams to produce margin models that stand up to scrutiny and inform smarter growth planning.
From Financial Model to Investor Narrative
Gross margin is more than a performance metric—it’s a reflection of how well a company understands and manages its delivery model. When investors see a high gross margin profile, their next question is often: Are the assumptions behind this margin credible and well-supported?
A well-structured COGS model gives operators and investors clarity on where costs originate, how they behave at scale, and which levers can influence gross margin over time. It helps teams separate fixed from variable costs, flag margin compression risks early, and identify areas where delivery can be optimized without sacrificing quality.
COGS modeling is a strategic advantage—shaping not just how early-stage companies report results, but how they lead investor conversations with clarity and conviction.
Want to sharpen your COGS model or align your margin strategy with investor expectations? Contact our FP&A team to learn how we can help.
