Are you ready to self-fund your business improvements?
In my experience I have found that there are simple steps an organisation can take to self-fund their ROI on data warehousing and subsequent supply chain improvements. Let’s start with some recently reported facts.
At a recent Supply Chain conference, Smart Conference 2009, a survey was discussed where senior executives had been asked for their top priority supply chain initiatives.
- 70% highlighted Supply Chain visibility as a key improvement objective
- 55% rate cost containment / reduction as highly important
- 60% identify risk management and risk awareness as key initiatives
- 58% were actively working to adopt demand driven operations eg: produce only to demand rather then try and forecast what people might buy
In fact, each of them agreed that their overall goal was to improve customer service as a foundation for customer retention whilst exploring internal and external processes to identify opportunities for cost reduction but equally ensuring that risk is properly managed.
As you might expect, these initiatives don’t materialize unless you have a clear insight into your business. Some call it a single point of truth. Others have likened it to hovering above your business in a helicopter so you can spot every opportunity below you.
It’s not rocket science to recognize that this is where data warehousing plays a central role. Essentially data warehousing brings all your business data into a single repository from where analytics turns everyday data into business insight. It’s the equivalent to that helicopter or better still, it’s a fleet of helicopters because your business insight can be made available to your operations people so that effective decisions can be made where it counts – at the customer facing level. Put another way, everyone becomes a qualified pilot.
So assuming you have identified the supply chain benefits that can be realized, how can your data warehousing initiative be immediately self funding? There are a number of possibilities and it is worthwhile taking a look inside your own business to explore the potential. Here are several existing real world examples that might provide some stimulus.
Oh and before I forget, all of the following can be achieved long before you recognise the benefits flowing from your supply chain improvement!
UNDER THE DESK REPORTING: Often I find situations in organisations where every business unit supplements existing standard reports with ‘under the desk’ spreadsheet analysis and reports – this can be a significant cost just in administration alone. Data warehousing eliminates the additional administrative burden and you can realize an immediate flow of savings to fund the data warehousing project.
REMOVING DATA SILO’S: Unable to obtain a single answer on the performance of your supply chain? If every business function has a separate data store, no wonder each set of data is different from the next! Transfer all this information into a single data warehouse and not only get one answer but also save opex by annualising support costs.
INTEGRATING ACQUISITIONS TO DRIVE SYNERGY BENEFITS: Where an organisation has a strong acquisition growth strategy, by transferring acquisition data alongside group data the company can easily compare and identify synergy opportunities.
MONTH END CONSOLIDATION: Many organisations exist as a necessary combination of disparate organisations collectively operating as a group of companies. Whilst this can have significant operational benefits the challenge of month end and year end financial reporting can mean a lot of hard work for the finance team. If all the business data is transferred into a central group data warehouse, then month end accounting can be completed in a matter or 3 or 4 days.
In so many situations gaining a single view across the entire business is the starting point for recognising Supply Chain improvements and managing associated risk. Moreover, such a move sets the foundation for empowering operational managers with business insight to ensure decision making can be affected through every level.
Obviously any such move has to be supported by strong ROI, and that should always be the case. But as you can see there are several other areas where immediate ROI can be wrought, from administration productivity and removal of data silos, to integration of acquisitions and more efficient month end consolidation.
There are too many examples of easily achieved and immediate ROI to list here – but please contact me if you would to discuss further. In the meantime, I would encourage everyone to follow the experiences outlined above; you will probably be amazed at what opportunities lie under the desk – so to speak.
Do you have any examples you can share?
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Robert Heaton
Image Source: BBC News
