Appleton Greene – Business Operations
Procurement Management
Appleton Greene Having the right procurement management process in place has the potential to save companies millions or even billions of dollars per year depending on their size. A way to tackle this issue is to look at both external and internal levers to reach the desired outcome. Some of the external measures would be understanding seasonality of the products/services, lead time, negotiating preferred rates via bulk purchase requirement, just in time delivery, re-negotiating favorable payment terms to improve cash flow, determining method of awarding contracts etc. Some of the internal measures one could implement would be: introducing a standardized procurement process, defining procurement strategy and structure, introducing and leveraging appropriate technology and systems, developing appropriate plans and measures, etc. To maximize the effect of both of these levers, and bring things full circle, one should look to co-locate procurement support personnel with internal customers in order to gain greater understanding of requirements and improve integration efforts.
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Customer Retention
Customer retention is a universal problem small, medium and large businesses face alike. With customer acquisition cost rising, the need for businesses to be innovative and assume a proactive role in the retention of clients is even more important. Some key statistics that highlights this area are: 68% of customers leave because they are unhappy with the service they receive, 14% are unhappy with the product or service, 9% decided to use a competitor etc. This shows that there is a great opportunity to reverse the trend. The key is to understand what levers will develop the maximum positive outcome and ROI.
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Process Improvement
The core of process improvement initiatives should focus on 4 main outcomes sourced within the context of exceptional customer service, operational effectiveness and operational productivity. These outcomes are: reducing processing timeline; improving outcome predictability via role and responsibility alignment; reduction or preferably elimination of redundancy; and meeting or exceeding quality requirements. There is an art and science to this, with the science comprising of the systematic approach to implementing this change with the art being the “human” element and their willingness to adapt their behavior to ensure its success. At the fundamental level one should look to do the following: develop a clear project purpose, ensure a clear project scope, obtain the right project sponsorship level, understand the past (people and process); have clear milestones to monitor projects progression, and transparency on the main objective so that all players buy into the process.
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Contract Management
Organizations in both public and private sectors are increasingly facing pressure to reduce cost while improving operational and financial performance. In addition to that, globalization, new regulatory requirements, and increases in contract volume and complexity highlight the importance and benefits of an effective contract management system. The key to a successful contract management process can be seen when the following is observed: service delivery continuous to be satisfactory and realized business value appears to be beneficial for both sides, supplier is cooperative and responsive, organization understands its obligation under the contract, there are minimal disputes or surprises, a professional and objective dialogue over potential changes while under contract can be undertaken, productivity efficiencies can be observed and measurable. One also needs to ensure that the contract itself should align with the company’s procurement strategy. This will ensure that minimal exception approvals need to be obtained and create a fair and transparent structure for contract awarding which helps suppliers better understand the organizations expectations while improving their service levels.
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Accounts Management
In the world of business, it’s always a great joy to acquire a new account. But then moments after the master service agreement is signed a new reality dawns on you. You just spent months or sometimes years breaking into the account and now comes the new challenge. How do build a pipeline of business? How do I maintain a renewable business segment so that I’m not constantly hunting for 100% of my business? How do I deliver a win/win deal? How do I ensure on time delivery as well as deliver exceptional quality of work repeatedly? How do I build the right relationships at the top and also have the right level of sponsorship to ensure our continuous livelihood? How do I keep my competitors from squeezing us out as we increase our footprint and potentially pull work away from them? How do I properly manage our business operations and negotiate favorable terms so that we can get paid on time for service delivered? These are questions that once one has a proper handle on, will lead to an account set up for success.
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Outsourcing Strategy
As companies continue on their growth journey and business needs and requirements become increasingly more complex, one quickly realizes that trying to develop all the necessary knowledge and talent internally can become a rather challenging objective. The reality is that either the need is so short term that it doesn’t make sense to build that capability internally for such a short shelf life of the needed object, or by the time the resource is scaled up on the required knowledge, you could lose first mover advantage that could be key to success, or you might simply want to make sure there is a linear relationship between your costs and the business need so you don’t have a built in cost structure that unnecessary saddles the business during a downturn. A great option to resolving this, is to develop an outsourcing strategy. Some of the benefits, are cheaper costs, readily available key resources, getting industry best practices. However, on the flip side, one also has to also look for certain things such as, is the partner the right one to scale up at the speed we need? Will our sensitive data and strategic initiatives be properly protected? Will we be treated as a preferred customer which will be key if they become involved in business critical projects/programs. If it’s an international partner, how do we manage key things such as export control, taxation requirements and employment laws.
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Strategic Business Planning & Modeling
The reason for creating a strategic business plan is quite obvious. You are essentially mapping out where as an organization you want to go and more importantly, exactly how you want to get there. The journey can turn out to be quite dynamic and complex. This road map can be built based on the current situation and the planned future .
To ensure the right frame work is created one should have these 4 elements: The What (This describes what the organization does and what it is aspiring to achieve which includes goals, objectives and quantifiable performance metrics); The Present (The organizations mission, guiding principles, organizational strengths and weakness); The Future (The organizations vision and targets), and The How (The optimal route to achieving the stated goals and objectives). As you can imagine, a well-documented strategic plan is essential for organizing and communicating thoughts. Without this, goals could turn into a moving target and vastly reduce accountability.
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Customer Relationship Management
Most organizations look at Customer Relationship Management as a technological solution for problems in certain areas, while making the mistake of supplementing it with large amounts of uncoordinated initiatives. Instead, a successful customer relationship management strategy should have the optimal mix of human, technological and process interface. The degree of complexity for successful relationship management typically varies depending on certain factors such as company size or whether the product or service being provided is either niche or commodity. For example, in a small company, customer relationships are more intimate and therefore the management process has the highest level of experience based decision making, with technology sparely used for data archival purposes. In a medium sized company you would have a combination of both, but also a standard template on how the human engagement model should be managed. For large companies, this would have the highest level of technological support, which generally would be managed by a CRM system and through analytics advise on customer intervention points and quantify and predict potential risks of customer attrition. As for products/services types, for the niche segment, one has to take customer feedback at a granular level since defection of a few customers could have a larger impact on revenue while for commodities one can gather feedback at a market segment level.
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Performance Management
Performance Management is a critical capability to develop in all companies, yet the process of measuring performance is typically not well defined or integrated. The key question then becomes, how do we get it right so that Individuals, Team, Process, Machines, and Corporate Support Teams all can work together to help contribute towards the organizations strategic goals and KPI’s. But in order to do this, one most have a fundamental understanding of the current state of performance and consequently the target state so as to now understand the gap and strategize on how to close this. It also requires having a process that would help the organization identify and execute the defined action plans and move towards the agreed upon target date with the support of the available resources. But within this overarching process, one must also have several built in feedback loops so as to implement continuous improvement measures in order to ensure one’s achievement doesn’t become static while taking into perspective new learning and observations.
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Sales Performance Management
A lot of companies go through the hard part of identifying and hiring the sales team. But unfortunately they do not realize the importance of making sure to provide continuous support and training. After all, these are the faces of your company and the first interaction point between the company and customers. While on one hand most might look at Sales Performance Management as a one way street which is simply tying a sales executive’s performance directly to the revenue generated, while allowing the “how” to be a black box process. Usually highly successful companies also have highly successful sales teams and this is by no accident. But this also does not happen overnight. It’s generally a 2 way process that keeps key factors in mind such as: creation of business plans and how to forecast, having the right mentor structure in place, transformation of behavior through continuous coaching, reduction of non-value add activities via technological support or outsourcing, ensure compensation plans push the right behavior, proper and continuous training on products/service offerings, and support from leadership team just to name a few.
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Sales Outsourcing
Outsourcing Sales can be a risky investment of both time and money. However the reality for some companies is that the ROI on trying to reach every single customer directly is just too low. Therefore, one has to ensure the right support model is in place to ensure a win/win partnership with a sales partner so that they directly motivated to maximize sales with minimal push from the main product/service provider themselves. There are some fundamental characteristics a company should look for when selecting a sales partner which could be a combination of: subject matter expertise, marketing strategy, qualifications of their executive team, industry experience, list of current clients with similarities to you, quality of lead database, action plan to nurture non-sales ready leads, internal process to manage lead quality and understanding how that is managed, provable sales results, and customer referrals on long term engagements. All these combination of factors should help create a picture of whether the potential sales partner is right for you or not.
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Global Partnering
There are various reasons for entering into a Global Partnership arraignment whether it’s to jointly provide products or services to a new market, or to utilize a partner in that market as the sole distributor or performer of service. These also could range from the partner having an intimate knowledge and pre-existing brand awareness within that market, to more regulatory reasons such as the particular country having complex employment laws, visa requirements and tax structure. But whatever the reason is, once you have identified that you need a global partner, the next question is how do you identify one to work with? Does that partner understand the country’s cultural rules of engagement? Do they have resources well versed in the potential customer’s native tongue? Do they have other business partners they can refer for feedback on their quality of service? Can they help us further innovate and improve our existing products and services? Once one has identified the right Global Partner, having the right governance structure will ensure a continuous review of the partnership and have the right level of attention whenever problems arise so they can be addressed and remedied.
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Mr Ashade is an approved Senior Consultant at Appleton Greene and he has experience in management, production and customer service. He has achieved a Masters of Business Administration and a Bachelor of Science in Electrical Engineering. He has industry experience within the following sectors: Energy; Oil & Gas; Manufacturing; Utilities and Electronics. He has had commercial experience within the following countries: United States of America and India, or more specifically within the following cities: Dallas TX; Houston TX; Saginaw MI; Laurel MS and Bangalore. His personal achievements include: Top Account Management Award; implemented operational improvement processes; improved plant operations performance; strategic planning for Fortune 500 and grew revenues $24M to $75M. His service skills incorporate: strategic planning; sales improvement; process improvement; vendor management and performance measurement.
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