Most large complex businesses are missing a big opportunity for improved execution effectiveness due to inaccuracy, timeliness, incompleteness and reliability of their operational reporting.
This could be partly due to data quality, the robustness of the systems and general governance.
Many organisations are addressing this point – by re-implementing DWs and ERPs – many with a “we will get it right this time” approach.
Our experience however indicates the problem is structurally different to the problem these traditional systems and approaches are aimed at solving. Indeed they for a large part form part of the solution. They cannot, however provide the whole solution on a reliable and consistent enterprise class scale
This current limitation within current systems results in
- Lack of focus for functional teams to get the specific insight they need – what’s offered is too general for the teams to work
- Lack of cross function collaboration because the specific reports they do have are not aligned so no one is speaking a common language?
- Lack of granularity – to get to the point of specifics – that can be discussed within and across function to take action
- Lack of completeness – so each function sees their view but not the broader view – missing context. The supply chain optimises for delivery messing with customer services, sales make discounts but not concerned with execution results, and customer service only see poorly informed customer classifications. Nothing aligned but all around the same theme and customers.
- Lack of reliability due to massaged manual data to get to specific reporting – not contained in standard systems?
- Lack of speed to analyse due to difficulties in compiling large reliable datasets
WHY THIS LIMITATION IN AN ENTERPRISE IS AN ISSUE:
|The number one issue of all operational MI is getting the right precision in the reports to take targeted action. It’s not a limitation of the reporting layer. It’s a limitation of the underlying dataset not able to present a meaningful true cost dimension.||This means only a partial view is obtain at best, with a lot of manual time consuming intervention from different functions that serve to introduce delay and create unreliable views in say Excel preventing true collaboration and alignment around an agreed set of figures.|
|Point department / enterprise technology solution have sprung up around this, complimenting the existing infrastructure limitations and taking out Spread-marts but they have their own limitations.||Whilst they help industrialise the spreadsheets that have sprung up due to group IT and group systems constraints, they address the symptoms (excel proliferation) still don’t address the core issue of limited enterprise scale.|
|Growing amount of indirect costs relative to direct costs. This is true for SKUs carrying manufacturing overhead and customers carrying service overhead.The problem is amplified further with the growth of global business services that aim to execute en mass at scale and price through offshore / offload more and more services||Whilst this lowers the effective total transaction cost, it comes at the price beyond this. It creates less flexibility and resource consumption transparency, which is a further hindrance and disincentive to optimisation, and further hinders transparency of the true cost vs. the ever shrinking direct cost due to aggregation of global services and offshore outsource scenarios.|
|An operational leader will require several cuts of their reports. One with the direct costs the other view without cross charges and overheads allocated. However more and more of their overheads…they have consumed “for free” or charged for somebody else’s consumption…result of operational complexity and lack of transparency. The question is then, when making operational tweaks and optimisations on SKU Customer Channel, Category, Process, where do you start?||The pure direct cost view tells you very little of meaning. Knowing how much you sold to a customer when, and in total over time, tells you nothing of the complexity and cost to your organisation driven directly as a result of that customers behaviour. Like for instance demanding additional services like packaging that are only transparent to the warehouse and customer service.The report can be fine, but if the underlying data is imprecise to take operational decisions it’s not helpful.|
|Current ERP systems throughout an Enterprise typically vary greatly due to local differences and inconsistent implementations. Enterprise EDW systems do not hold detailed level data, nor have central and indirect costs accurately assigned to a transaction level to highlight local brand SKU, channel, category & customer views.||Initiatives at Group wide level have great difficulty in obtaining consistent and accurate data, and at a Global level markets can very rarely be compared or contrasted whilst data cannot be rolled up to give Global views of Customers nor give Brand/Product/Channel/Category managers a global view or the ability to compare performances across markets|
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