
Case Study — Sales Activity Measurement
ITeMGroup works with a major manufacturer to measure
sales activity.
Background
Our client is a large manufacturing business with operations in every
State. Recently, the company centralised its manufacturing structure,
bringing together manufacturing sites that previously operated under separate
managements teams and brand identities.
The new, unified structure was designed to deliver an improvement in customer
focus. Through the restructure, all business accounting was brought under
a centralised ERP system. This allowed the company to identify costs and
revenues for any job around Australia, and the system could be interrogated
along business lines.
However, the accounting system was not suited to reporting along customer
or sales function lines. In order to measure sales activity by customer
and sales representative, etc., the company commissioned ITeMGroup to
set up a system to interrogate the company database and to deliver the
appropriate business information.
The Challenge
First, the challenge was to identify the measures that would add value
to the business. It was necessary to be able to report on a wide range
of sales KPIs across all sales management. It soon became clear, however,
that the business had employed several different accounting methodologies
and, in order to measure activity, these methodologies needed to be made
consistent.
How ITeMGroup met the challenge!
After assessing a number of options, an on-line analytical application
was introduced by ITeMGroup. A development team was commissioned to set
up some initial reports and to present management with tangible examples
of how the system would work. The company responded by making available
a “business champion” to drive the outcomes.
Four key elements were identified as being
of value to the company and KPIs were set:
• Sales activity
• Debtor Management
• Forecasting
• Customer Relationship management
It was agreed that the first two items would represent a first phase of
measures to be delivered, and a Sales Cube and a Debtors Cube were developed
for these KPIs.
Specific reporting measures were identified,
including:
• Sales revenue
• Budget
• Rebates, discounts, settlement discounts and agency commissions
• Sales volume
• Cost of sales (Materials and Manufacturing costs)
• Value Added (ie Net Revenue less variable costs)
• Debtors days outstanding, profile and value
• Scheduled but as yet incomplete jobs
• Number of jobs
In addition, these activities had to be
able to be interrogated by:
• Customer or Customer Group or Classification
• Timing (ie, week, month year in which they occurred)
• Sales person or function
• Product
• Type of work
• Title
• Method of production
• Industry Segment
• Production Planner
How ITeMGroup delivers business success
for this manufacturer.
As a result of implementing Business Intelligence (BI) systems to measure
sales activity, the business has achieved:
• More accurate reporting of sales figures, through elimination
of accounting inconsistencies
• Better sales performance, through setting of appropriate targets
& performance reviews
• Tighter debtor control, and identification of customers with consistently
late payments
• A complete view of the effect of payment liabilities (such as
rebates and agency commissions) on forecast profit
• Better communication to customers, through delivering on-line
access to job status and delivery information to the sales staff
• A better understanding of the real value of each customer, taking
into account all customer groupings and affiliations. |