Time is Money

From an Aberdeen Group report…

Companies suffer when the lag time for determining operational performance is greater than the ‘decision-window’.  The risk of not making timely decisions is exacerbated when the information that decisions are based on is wrong.

Operational performance drivers are characterized by their immediacy.  For example, the ability to respond to customer requests/demands is an operational capability that is measured using metrics such as ‘customer response turnaround time’.  These performance metrics can roll-up to and be a leading indicator for strategic performance metrics such as overall customer satisfaction rates.

Poor executive visibility is displayed by a lag time between actual business events and the ability for executives to receive information and performance related analysis of the events in order to make timely, well-informed decisions.

My Thoughts…

This Aberdeen Group report provides more evidence that ‘In order to make critical business decisions, decision makers need the right information at the right time and in the right format’.

Aberdeen identified a key performance indicator [KPI] – customer satisfaction rates, but there are many others.  Your company may be watching: Cash on hand; Sales by customer; Inventory turns; Shop floor capacity; Sales backlog; Cash flow; Accounts receivable; Accounts payable; etc.  Identify the KPI’s that are critical for your company’s success.

What difference would it make to your company if you could immediately see if a ratio or number was headed in the wrong direction?  Armed with that information, you should be able to react quickly enough to minimize the financial impact on your company.

If you should see that the volume of business you are getting from your best customer is decreasing, you could speak with them to resolve any issues they might have.  If you should see a reduction in sales backlog, you could either work with sales to increase orders, cut back on capacity to reduce costs or try some other strategy.

With the economy in its current state, some companies will fail and some companies will become winners.  Become one of the winners; provide your decision makers with the right information at the right time in the right format.

Your Thoughts…

What steps is your company taking to become one of the winners?