How can you improve profitability when your commercial teams are drowning in oceans of data but thirsty for the strategic information they need to grow the business?

Increasing profitability is hard even for the most talented and hardworking commercial and technical teams:

Customers demand better products at lower prices, global competitors are becoming more aggressive while costs continue to rise, new technologies threaten to change your industry and corporate data continues to grow at a whopping 41% annual rate⁽¹⁾ making it more and more difficult to get answers about what's really happening.

Your Strategic Marketing should be headlights of the business constantly anticipating future trends and exploiting them in a manner that increases market share, profit and cash flow.  Their focus needs to be mostly outside and in the future but your corporate data is internal and in the past.

Research shows that organizations with strong analytics outperform the S&P 500 on average by 64%.⁽²⁾  You’d like to be in that group, but your IT investment is designed to support Accounting, Finance and Operations instead of enabling the strategic activities you need to fuel growth.

As a leader you’d like your organization to be more market driven and customer focused.  Turning data into Strategic Knowledge becomes a competitive advantage as anyone in your team can understand market trends and customer needs before and better than your competition.  However, this can be a challenge because your IT tends to be technology driven, doesn’t speak the same language your commercial folks do and is tied up with technical priorities, internal policies or governance constraints.

(1)  Aberdeen Group

(2)  Harvard business Review: Analytics and the Bottom Line – September 23, 2010

Why it’s so hard to develop a strong Strategic Analytic Capability for growing your business.

Marketing, Sales and R&D teams often struggle to increase profitability as they can’t always clearly visualize the connection between strategic objectives and tactical execution.

It takes days to answer simple questions about market share, profitability or growth of a particular segment, product line, customer or competitor.  Analysts go through an inefficient manual process where they run queries, export them to spreadsheets, manually cleanse data errors, add look-ups from external data sources, and finally create pivot tables to find the answers.  Even worse, they have to go through the entire process over and over again every time they need a progress update, either the following week or at month-end, quarter-end or year-end for each one of the business units and markets they support.  Not only is this inefficient but using analysts’ personal assumptions to fix data actually makes matters worse. You end up with multiple data silos and different versions of the truth that further complicate and slow down the decision making process.

People spend important meetings’ time arguing whose data is correct instead of focusing on the critical issues that drive growth.  The numbers generated by Finance do not agree with the analysis performed by Marketing or the explanations provided by Sales.  They need a single version of the truth, but different folks run different queries, made different data cleansing assumptions and customized their spreadsheets based on different metrics.  The result: unnecessary long delays to take the necessary actions.

It is nearly impossible to visualize the profitability of global products or develop a Key Account Strategy for global customers because different branches, subsidiaries and business units use disparate and incompatible legacy systems.  They classify business units, markets, segments, customers and product lines differently.  You know there has to be a better way to visualize this information so the sum of the country views makes up the regional views and their integration, in turn results in the global view – instantly.

As a result people don’t have a clear picture of your business:

Commercial teams cannot easily spot the 40% of your customers that drain cash nor understand the causes.  Chances are the top 5% of your customers generates 50% of your profits while the bottom 40% of your customers generates almost no profit at all.  Your teams need to know at any time of the month, quarter or year exactly which customers fall in each category, and understand the reasons, in order to drive the business towards a higher, more balanced and stable bottom line.

You risk losing a major customer because your organization gives the same priority to a five thousand dollar customer as a fifty million dollar one.  Outside the commercial areas, employees cannot recognize your strategic customers — much less understand why you deem them so.

Sales people seek volume at the expense of profit. Most don’t have a clue about how profitable their customers are across their territories.  They have never seen a P&L of their own territories showing which customers and products generate profits and which ones drain cash.  If you pay them a commission, shouldn’t it be based on profitable growth and not on volume or revenue?

How can you drive new product profitability if you cannot monitor product innovation metrics quickly and regularly?  Your organization invests significantly in R&D, product design and engineering.  However, it’s always difficult to measure the year-to-year vitality index or profitability progress of new products and understand if the differentiation-to-commodity ratio is moving in the right direction.

Your team cannot clearly visualize the business opportunity pipeline.  Nobody knows whether next year’s growth will be organic, if it will come from new markets or from aggressively taking market share from your competitors and at what price.

What you really hope to accomplish instead…

Your commercial teams consistently satisfy customers’ needs faster and better than the competition.  This creates customer value, while giving you a profitable competitive advantage.  Accurate analytics driven decision making aligns tactical actions with the strategic direction necessary to grow your business:

Strategic teams save precious time by quickly finding the answers they need to run the business.  They finally share a single version of the truth where analyses run by Finance are in full agreement with those run by Marketing and Sales with no need to perform time consuming data manipulation using multiple spreadsheets.

Global, regional and local business performance views and metrics are consistent and fully integrated.  It’s important to see how your individual customers and products make up the 30 thousand feet view of your business.  It’s also easy to visualize global metrics, understand the impact and profitability of global products or develop a Key Account Strategy for global customers—even if different companies, subsidiaries and business units use disparate or incompatible legacy systems.

Everyone can see which 5% of your customers generate 50% of your profits and why.  They can also visualize who are in the bottom 40% of your customers that generate no profit at all.  They can monitor this at any time of the month, quarter or year, and understand the causes, in order to drive the profitability distribution towards a higher, more balanced and stable bottom line.

Your organization monitors Product Innovation Metrics quickly and regularly.  Everyone can measure the year-to-year, or even the quarter-to-quarter profitability progress of new products, their vitality index and the differentiation ratio of every product line, business unit or market segment.

Your entire team shares a real time view of the business opportunities in your pipeline.  They can instantly quantify the impact and probability of success for new business, as well as the risk associated with those pieces of business under competitive threat while visualizing your competitor’s market share in different regions and segments.

Strategic Customers enjoy the priority service level they deserve.  Everyone in your organization - not just Sales or Marketing - recognizes your Strategic Customers and Key Account locations and treats them accordingly.  Employees no longer give the same priority to a five thousand dollar customer as a 50 million dollar one.

Sales people increase their profitability by becoming “General Managers” of their territories.  They know how to generate profit in their territories and never again chase unprofitable volume.  They can see a profit & loss statement of their territories anytime and run P&Ls for each individual customer parent and branch location, showing the products generating profits, the ones draining cash and more importantly, understanding their causes in order to manage for profitable growth.

If you’re not seeing these kinds of results, you’re not alone.  Very few companies have mastered the transformation of their data into Strategic Knowledge to become true analytic competitors ⁽³⁾.

You cannot achieve this kind of performance by hanging onto traditional approaches that keep IT and Strategic Teams disconnected or by trying to find the magic software to do the trick.  But there is a way to make this happen in your business...

The Solution?  The Analytics Driven Profitability Program

Analytics Driven Profitability is designed to help you gain a significant competitive advantage.  It’s a customized service that integrates your external market intelligence with your internal business data to be used a strategic asset to grow the business.  Depending on the business size, data quality and accessibility it typically takes three to six months to complete.

We build a Strategic Analytics Toolbox that captures your business model, market structure and competitive landscape to give your team the information it needs to find accurate answers through an intuitive and easy to use representation of your markets, business and profitability engine—one that they’ll be excited about using to grow your business.

We provide extensive training so your team learns to perform strategic and competitive analysis on the fly.  We enable your team to find accurate answers through an intuitive and easy to use representation of your business.  Everyone in your commercial team will be able to find answers to complex questions quickly by themselves without having to depend on IT analysts, BI experts or super-users to interface with complex systems.

Our objective is NOT to revamp or replace your entire data warehouse, data marts or enterprise systems.  Based on what you already have, we create a Strategic Analysis Module where your commercial teams can visualize the relationship between Market, Business and Profit and use that information to become more competitive.

(3) Competing on Analytics – The Science of Winning - Thomas Davenport and Jeanne Harris  

What makes the Analytics Driven Profitability Program unique?

The Analytics Driven Profit Program is designed to provide a strong analytic advantage to your Marketing, Sales, R&D and Strategic Business teams so they can effectively use the business data they already have to beat the competition and increase market share, revenue and profit.

Our program transforms raw data into the relevant, accurate and useable Strategic Knowledge your commercial team needs to grow the business.  The program focuses on the use of Business Analytics as a competitive advantage to obtain sustainable and profitable growth.

We go beyond dashboards.  We provide your entire team the capability of performing strategic and competitive analysis intuitively on the fly.

We’re always available for you and your team.  While it sometimes means a client will have to wait before we can start a new engagement, we limit ourselves to starting one new Analytics Driven Profit Program per quarter so that each client gets the individual attention they need.

Our program removes the barriers that constrain analysis driven growth by providing:

• Data Quality:  Our program brings strategic meaning to your data.  We cleanse, organize and structure your business data and make it compatible with your market and competitive intelligence.

• Self-Serve Approach:  We use tools that stimulate analytical reasoning facilitated by interactive visual interfaces.  This ensures that everyone can effectively obtain the answers intuitively without the intervention of IT, experts or analysts.  This saves the organization a lot of time and effort and enables the decision making process to take place at the speed of thought.

• Alignment of strategic objectives with tactical execution:  This is necessary to adjust your action plans as soon as results start to deviate from their targets.

Key benefits of the Analytics Driven Profitability Program

After completing our program you’ll have:

A strategic organization that shares the same integrated view of the current facts about your business, regions, market segmentation, product and customer profitability, best opportunities for growth, product innovation trends, R&D projects and competitors’ activities; And uses it to outsmart your competitors through fast, effective and profitable decisions.

A motivated strategic team where business leaders, marketing, product managers, sales and R&D folks concentrate on creating profitable customer value instead of wasting time manipulating inconsistent data from multiple silos.

Clarity and Simplicity.  You won’t have to rely on IT analysts, system experts or super-users to interface with complex systems.  Everyone in your commercial team will be able to find the correct answers right away.

Transparency and Accountability. While that may make some folks uncomfortable at the beginning, it’s crucial that everyone is clear about who is accountable for what and how actions are connected to profit generation.

What’s included in the program

There are seven parts to the Analytics Driven Profitability Program:

Phase 1 – Planning and Objectives.  We talk with your key people to understand your market structure, business model, product lines and the issues you face in the different business units.  Then we discuss the objectives underlying your strategic metrics and customize them to fit your needs and company culture.

Phase 2 - Data Assessment.  We explore your business intelligence, ERP, Data Warehouse and CRM systems to determine the type and semantic quality of the data available.  We may need to work closely with your IT folks if the semantic aspects of the data are not in line with the needs of your commercial teams.

Phase 3 – Data Structuring.  Working closely with your strategic and commercial teams.  we cleanse, organize and structure your marketing knowledge base to reflect accurately markets, segments, customer and competitive reality.

Phase 4 – Integration.  Then we integrate disparate data from your different sources.  We need to work closely with your IT organization to provide the connection between competitive, market intelligence and transaction data and create your custom Strategic Analytics Toolbox™.

Phase 5 – Testing and Feedback.  We work closely with your teams along every stage of the process to eliminate surprises and improve the quality of the results.

Phase 6 – Training.  Although the Strategic Analytics Toolbox is very intuitive, we provide the necessary training in order to fully exploit its potential within your business.  Attendees will learn how to perform strategic analysis and find the root causes for performance, instantly and interactively.  Training includes real world practical exercises to perform diagnostics for your own business.

Phase 7 – Maintenance  Your business is dynamic; nothing stays the same:  market trends change, your competition tries new attacks, new opportunities arise and customers decide to merge.  Your marketing and sales teams are on top of this but need a process to funnel this information and keep the Strategic Analytics Toolbox accurately reflecting reality.

Personal Support.  The program includes unlimited support by phone and e-mail with same day response in most cases because you shouldn’t have to make an investment decision every time assistance is needed.

Is the Analytics Driven Profitability Program right for you and your organization?

We work with companies that struggle to get the information they need to increase profitability.  They all share the frustration of internal transactional data that does not provide the clear strategic direction necessary for driving profitable growth.

The Analytics Driven Profitability Program was designed for mid size businesses that struggle to increase profit because their strategic business leaders, R&D, marketing and sales professionals cannot make sense of their own data to grow the business.  We show them how to turn their data into a competitive advantage to beat the competition and increase market share, profit and cash flow.

Our goal is to get your teams on the same strategic frame of mind to instill a deeper collective understanding of the Market-Business-Profit interaction necessary for the creation of value for your customers.

You are in business for many reasons but the main one is to make a profit.  The whole objective of our program is to provide your commercial teams with the fast analysis tools they need to increase your bottom line by at least 10%.  If we are not fully convinced that our work will improve your profitability we won’t take on the project.

Different clients need different things.  One size does not fit all.  We custom design a Strategic Analytics Toolbox to produce the results your company needs.

We don't like Bureaucracy.  Processes are important, but if your organization is passionate about complexity or bureaucracy this is not for you.

Where do you go from here?

If you have read this far, you might be wondering whether this program could work for your company or not.  One way to help answering that question is our complimentary Strategic Analytics Session.

During the session we’ll explore the challenges you and your team face, the kind of results you’d like to see, and whether this program will be of help or not.  Even if the program isn’t a fit, you and your team will leave the conversation with more clarity about your issues and excited about what’s possible for the future.

If this introductory session is something you could see your team doing, the process starts with a brief, no-obligation call to get acquainted, discuss your situation, and determine who needs to be involved.  And rest assured.  We’ll never push you to make a decision or pressure you in any way - that’s simply not how we work.

The initial conversation will take about one hour and can be done ideally in person, or by phone.  Click here to arrange a time to have a strategy session and I will be in contact with you within the next 24 hours.

Looking forward to seeing how we can help.

Warmest Regards

Bill Cabiro

Bill

Managing Director

Strat-Wise Consulting