In any given week, there are as many reports that the economy is recovering as there are those saying that optimism is faltering – and there are still worrying times ahead. Take for instance the British Chambers of Commerce’s Economic Forecast warning that the UK economy still faces ‘worrying’ times and Business Secretary Vince Cable’s recent comments on the true extent of the economic crisis.
Amidst all this speculation, one point remains true – uncertainty reigns supreme; businesses simply do not know how the market will develop throughout the remainder of 2011 and beyond. The result — business owners and managers run the risk of spreading themselves thin trying to best prepare for the future.
We all aim at establishing and retaining a competitive edge in the marketplace, whether through speeding up our ability to capture market opportunities, finding new efficiencies in core business processes or streamlining activity in order to drive greater productivity. A scattershot approach to this, however, will always lose out to a structured one: businesses must know how to gauge where their focus needs to be going forward.
Common practice for many businesses in the past has been to operate on a ‘trial and error’ basis, in which products and services are developed and marketed, sales are checked on a monthly or quarterly basis, and business strategy revised accordingly. The metrics – which are vital to strategic decision making – usually take some time to compile.
Were original sales targets met? Is the product or service profitable? Have there been unusually high levels of customer complaints? Has limited repeat custom been seen? Or have utilization levels been extremely high as a result of the work? Based on the answers to these types of questions, senior executives could then finesse their offering – shifting the offer , revising the solution and entering new adjacent markets.
However, the fact remains that, in today’s economy, businesses cannot wait for the traditional trial/error/correct cycle to run its course. Success in the current environment boils down to an organisation’s ability to turn on a dime; to assess and react to market opportunities in real time, as they happen.
Wholesale distribution company Justoffbase, for example, integrated its front-end web applications and e-commerce platforms with back-office financials and accounting to automate its core business processes.
As a result, long-winded manual processes have since been replaced with customers entering their orders directly onto the system, with data links to manufacturers’ systems enabling real-time product availability, pricing and accurate delivery dates for out-of-stock items to be displayed on the web site.
Crucially, staff are now able to see exactly what’s popular and can negotiate more aggressively with suppliers to acquire in-demand items to capitalise on current consumer trends.
As this example illustrates, when you come to assess where business investment should be made, the starting point has to involve looking at how much real-time visibility into your ‘business health’ is available. For example, what performance indicators are in place that can guide your sense of what and where you should focus time and investment?
If, as is often the case, you only have access to a few data points or your data is only available long after the fact then it will be more pressing to look to the solutions available in the market that will make this possible
Emergence of Cloud Business Management Suites
Internet or ‘cloud-based’ business management suites are quickly becoming recognised as the business tool that can provide greater, as it happens, insight into business operations. Because it lives on the web, business information goes into it “live” – as soon as the system knows an order has been placed, your inventory levels will be adjusted, P&L revised and you’ll have an up-to-date sense of where you are.
Amplify this over multiple product lines; add in other performance indicators including customer complaints and feedback and you’ll have a solid base for strategic decision making.
Ultimately, applying any focus to investment in your business requires an understanding of exactly where the business stands in the here and now. The reality is that if you don’t have up-to-the-minute insight into this, you will be less agile than those competitors that have invested in modern technology and business processes.
Set your sights there, so that you can keep a closer eye on the pulse of all aspects of your company – and empower your employees with the real-time data that allows them to make smart, informed decisions.
Not only will you be in a much better position to gauge where to focus your resources, but the chances are those resources will be ahead of the curve improving business efficiency, customer satisfaction and, ultimately, your bottom line.