Imagine tracking net-profit by customer, by product - on demand!

In a previous article, "Optimize profitibilty by managing value", I discussed the use of an application called ProfitFinder which allows you to analyze net profit by product AND customer along your value chains. This is an unique innovation around how profitibility is tracked and measured, that allows businesses to look at how value really can be managed to increase company net profit.

These would be the benefits of having this information at your fingertips:

• Customers Net Profit – compare to today’s Gross Margin – you can then focus resources on more profitable customers and their buying patterns and manage the less profitable customers.
• Customer / prospect costs – you can adjust the amount of sales activities and decide when to stop working on prospects when target marketing costs are reached.
• Resource capacity utilization – giving you the capability to do marginal marketing to maximize utilization of your resources to lower the fixed costs and increase total profit.
• Sales force effectiveness - track net profitability by sales person. This information allows you to better set sales targets based on profit, as well as allows you to manage sales accounts more effectively.
• Supporting departments costs per Value Chain – the ability to adjust the different departments costs involved in the value chains related to the profit that the respective VC brings in.
• Decision-making information by Value Chain from products/services/procurement through inventory/warehousing to customers/ markets, on a real-time basis or in batches on order.

RELATED BLOG ARTICLE:

• Data rich information poor

Organizational Restructuring - Aligning People with Technology

"Processes don't do work, people do." - John Seely Brown

I have been on too many technology implementation projects where Change Mangement, Organizational Transformation - or whatever you want to call it - is simply seen as "Training". Seeing Organization Change Management (OCM) during a system implementation as simply writing up new business processes, procedures and training people - is setting your new system up for failure!


OK - maybe 'failure' is a strong word. But doing by this, you are simply not maximizing your system investment.

Why spend a good percentage of your gross revenue on a great new ERP system, that hopefully has been built, configured and implemented using best practices, and then spend a fraction of this investment on the people who will make or break you new system? So, apart from training our people on how to use the system, what else can we do - you may ask. Well, here are a few things :

• Involve the people who will use the system in the system design and configuration. In this way, you ensure that their requirements are baked in, AND they start understanding how their jobs will change. The sooner people understand this the better.
• Develop 'powerusers' by involving them in system testing. These 'powerusers' will be your first line of system support, and will be key in establishing the new system as part of daily business.
• Involve people in the design of new processes that must change with the implementation of the new technology. Understanding how their daily jobs will change is part of managing any resistance to change.
• Avoid class-room style training.
• HIRE people who understand the new technology and business processes!
• MOVE people around as new skills are learnt and utilized.
• Compentate people for these new skills - retain & develop your investment in people.

Involving people in all aspects of a system implementation - even if it takes longer - will allow the new "champions" to shine, and to develop your greatest resource to ensure success after a system implementation.

RELATED LINKS

• Driving Business Benefits from your ERP Implementation
• Organizational Restructuring
• Managing Projects