Monthly Archives January 2015

Who Writes Your Reports?

Posted by admin on January 26, 2015  /   Posted in Business, Online Platform

Newspaper city route Graph

What Reports?

Reporting has been and still is the most important part of running a business. Without taking the pulse regularly (or better yet, constantly), how would you know if your business is healthy or sick, thriving or dying.

Here’s the catch, truly useful reports take careful planning and considerable time to compile. A truly useful report cuts down the amount of parameters to wade through, and it highlights the most important and relevant information for the business owners and managers to make not only good decisions, but to make those swiftly — because in decision-making, next to the quality of the decision itself, the timing is the most important aspect, and a lot of people don’t realize this.

And since it has to keep up with the changes both internal and external to the company, it also has to be modified continuously.

Another important aspect of today’s reporting is: Visualization. Far from being just pretty charts, modern reports takes advantage of the fact that our brain has a tremendous capacity to process information when served in a coordinated visual pattern.

So here comes the question, who takes care of the reporting in your company? The answer, as we shall see next, is not as simple as you may think.

No One?

Most surprisingly, most companies are not doing nearly enough tracking and checking the pulse of their business processes. Reporting is just an afterthought in which the goal is “just enough info to get by” instead of being recognized as one of the key aspects of the whole business operations.

Despite the increasing popularity of Executive Dashboards, Infographics, Data Warehousing and Business Intelligence tools in general, there are still far too many businesses whose reporting activities are reserved for end of the week rush jobs or those tense accounting department fire-drills where you can feel the heat rising at the beginning of each month.

In Short: Unacceptable. Someone has to be responsible to compile and generate your truly useful reports.

Isn’t That The Company Accountant’s Job?

While accountants should generate useful reports, they are limited to only one aspect of the business, the financials. Truly useful reports encompass the whole business operations, not just the financials.

Even in the realms of financial report, your accountant most likely would not have enough visibility into the business to tell you important information that could help you grow the business.

For example, a report from your accountant would state how much profit the business is generating this quarter, but most likely it will not say which part of the profit came from a high-maintenance customer who takes up twice as much resources to serve. Nor it would tell you that you have a leak in your business process because you are paying a vendor extra for something that isn’t contributing to your business process.

From customer demographics and statistics, to inventory flow and trends, to manufacturing logs and exceptions, to vendor analysis, and more, these are important “pulses” that a truly useful reporting should cover. The more regular and painless it is for you as the business owner / manager to get a hold of these information, the better you would be able to run the business and grow it.

In the ideal setup, financial reports would be one of the inputs into the reporting system. A whole lot of information can be cross-analyzed between departments in your business. By taking time to do this, these reports can yield insights that you never even considered before!

In Short: No. Your business accountant should be one of the sources for the data that went into your truly useful reports.

Is It The Business Owner?

Since the business owner is the one who ultimately make the decision for the company, it makes sense that he or she is the one who consume and utilize these reports the most.

The distinction here is between consuming vs creating the reports.

Business owners should use the reports to monitor, and make decisions, but if they are also the ones responsible for creating them, when will they have the time to read them? And sadly, since they are busy putting out fires (show me a business owner who is not doing this all the time) while trying to keep the sales pipeline filled up, more often than not, reporting takes the back seat and the business loses a lot of potential revenues from the lack of monitoring and decision-making.

In Short: No, the business owner should be the last person responsible for generating the reports. All of their time should be spent consuming and utilizing those reports to make business decisions.

Is It The Employees?

If the business owner delegates the report generation to an employee, then the employee should have enough visibility into the business *and* the knowledge and experience to build the kind of report that is truly useful, which usually requires a lot more than just familiarity with spreadsheets.

So not only does the business have to put a process in place to disseminate the visibility to the responsible employee(s), but also, there has to be an implicit (or explicit) trust that the employee would not abuse the authority by combining what they know about the company with the new information that is accessible due to the new level of visibility.

In Short: Maybe. Unless the company has the budget and the infrastructure to support a team of experienced reporting and data-analysis as staff, reporting is not a good side-job for existing employees due to the experience required and the sensitivity of the information.

Okay, I Give Up!

So really, who should do the reporting? The answer may surprise you: An outsider.

There are service providers whose goal is to do in-depth, automated, reporting for others. Due to the abundance of data both within your company and relevant ones outside (what often referred to as Big Data, sometimes correctly, other times not), these kind of services will become as mainstream in the near future.

One of the benefits of outsourcing reports is that you get a fresh perspective and an impartial view of your company’s data. Why is this important? Typically, a reporting service provider has a lot of experience seeing patterns of data that can be useful when mining for information. Let me explain below.

Business owners usually think that their data set is unique to their business, but this is often not the case. Whether we are talking about soil humidity data gathered via telemetry, or the number of customers who predictably buy a certain product each month, to an experienced data analyst or scientist, those are just numbers that exhibit a certain pattern of distribution.

In fact, these patterns are what makes things interesting. They can be visualized to give business owners a different view to their business. The kind of view that could be very useful to make those important decisions.

Another important benefit in outsourcing reports is the fact that the service provider has not stake in the company. They are motivated to provide the best service possible without having to know the meaning of the data that is analyzed.

In fact, any decipherable sensitive data should be scrubbed before it goes out of the company, and when the reports are generated, those went through an automated mapping process (setup within the company boundaries) that puts back the right context into the generated information.

In Short: The key to setting up a reliable automated reporting system is to find a good reporting service provider who knows how to handle your company data professionally. We don’t yet have household names for this kind of service, but there are companies who are working on that. Including nextCoder.

At nextCoder, we help our clients get a constant and useful, distilled, aggregated information that they can use to make business decisions better, quicker and with a higher degree of confidence.  Often times using the data they already have.

As the result, our clients experience a steady improvement in their visibility into their business processes and this turn into the ability to measure the relevant KPI (Key Performance Indicator). As the old adage says: What gets measured, can be improved, is certainly true in this case.

-WG

Subscription or One Time Payment?

Posted by admin on January 08, 2015  /   Posted in Business, Online Platform

The Question

When it comes to funding an online business systems that implements your business processes and ideas, which one is the better way to go? Pay every month (or year) or cough up a larger sum in the beginning and never pay again?

The first option is the Subscription model, where the cost of the development is spread over a period of agreed time (most often ongoing).

The second one is the One-time Payment model, in which the company decides on a budget and the system developers are given a certain period of time to design, code, and test the system. Notice something missing in that list? Correct, maintenance and modifications. A business system has to be maintained and also modified to suit the changes in the business. After all, the system is created to support the business, not the other way around.

What is the consensus?

Whenever I asked this question to a business owner, in seven out of ten the answer leans towards a One-time Payment (usually upfront and a much larger sum). Except those who has tasted the experience of a properly-planned and properly-executed Subscription model development.

In a sense, this is not surprising, it is human nature to prefer a one-time purchase rather than subscription, unless the benefits of paying subscriptions is clear (or if they do not have a choice in the matter).

The reality is, building a system to help implement a business process has a lot more parameters and is prone to changes, both from inside or outside factors. Therefore, and the statistics agrees, it is rare that a custom business system can be developed in one iteration. The successful ones are built in several iterations with some that takes care of the inevitable changes.

The Comparison

Subscription Model

  • The company pays a subscription periodically
  • The developers are motivated to continuously enhance the system because doing so will make their job easier. As the result, the system is getting more stable and robust over time
  • The system can be built to follow the changes in the business processes. This is very important when the company is trying to train and organize their employees in phases
  • There is time to build measurement functions into the system, enabling the company to know exactly how effective the system is. This is a key feature for those answering to a board of investors
  • Everybody wins in the end

One-time Payment

  • The company pays one time
  • The developers are motivated to do their best, but more often than not, the requirements collected upfront is not complete, therefore the system cannot be as stable and robust as it needs to be, before the time or the money (or both) run out
  • The system is highly susceptible to changes in the business processes
  • Everybody loses in the end

Can We Not Pay Later for Modifications?

Certainly, you can hire the same system builders or someone else to do the modifications to the system later on, but this does not solve the problem of whose responsibility is it to monitor the performance of the system and make sure that it is still aligned with the business process it is supporting?

If the business owner is willing to take on this responsibility, then the risks are:

  1. The business owner may not have the time to do it because he is busy running the business (as he should be)
  2. The business owner may not have the necessary skills and experience to determine when the system needs to be modified

The better candidate for fulfilling this role is actually the system builders. They are in the position to setup automated monitoring system (which in itself, an evolving sub-system) that can notify the business owner when certain events are detected within the system.

The cool thing for the business owners are: They are not wasting time monitoring the system, but they are notified so they can make the decision where it matters, at the business process level. The best way to get this benefit is to adopt the Subscription model.

Can One-time Payment Ever Be a Good Choice?

The answer is yes, if the following conditions are true:

  1. The system’s requirements can be defined clearly upfront
  2. And, more importantly, those requirements do not change a lot as time goes

A good example would be a well-known system like a shopping cart, or an accounting system. Unfortunately these systems alone are rarely sufficient to help a company serve their customers and grow at the same time. Most companies seeking to build their own system has way too many customized rules and a lot of unmeasured assumptions.

In Summary

In business today, you can’t survive without taking advantage of what technology has enabled us. From remotely scanning documents, to SEO marketing, to a full-blown employee resource tracking and management system, to a data-analysis system capable of evaluating the quality of customers, we have so many technologies that a custom business system can take advantage of, that also changes rapidly.

The only way to keep up with it is to have a team of developers who are always on the ready to make the necessary changes to the system. A subscription-based arrangement is designed to fund this kind of project because as they say: Time is on our side.


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