KPI

NetSuite publishes ‘e-book’ on General Business KPIs

KPINetSuite commissioned from SL Associates published a number of research projects into what Key Performance Identifiers were most important to NetSuite’s customers and what results they were getting through using NetSuite.

We have referenced the vertical specific results in our vertical industries sections, but can now provide information on the general business results – that is to say the cross-vertical results.

The KPI improvements were in three categories: Business Viability, Financial Management and IT Management and Resources.

Under Business Viability the two KPIs were 360 degree visibility and actionable insights (which increased between 55 and 80%) and reporting time and resources (which reduced by between 40 and 55%).

Under Financial Management the seven KPIs were time to close financial books(reduced by 45 to 70%), audit completion and support time (reduced by 25 to 40%), time required to support compliance (reduced by 25 to 45%), accounting staff productivity (improved by 25 to 50%), collection time for accounts receivable (reduced by 30 to 50%), order process efficiency and costs (improved by 40 to 60%) and billing efficiency (improved by 15 to 25%).

Under IT management and Resources the two KPIs were IT support resource costs (reduced by 40 to 65%) and business continuity/disaster recovery costs (reduced by 45 to 65%)

For a copy of the report please give your details in our contact form.

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What KPIs should you have?

KPIModern ERP or integrated business systems like NetSuite offer a range of standard KPIs (Key Performance Indicators) plus the ability for a fairly competent user to design their own very quickly. What’s more the results they give reflect up to the minute information.

If you have a range of ‘best in breed’ or bespoke business systems you will probably have to extract data from various sources, massage it via a spreadsheet and present it in the form of a report. If you are lucky the data will be almost up to date.

But taking the case of a modern ERP or integrated business system how do you decide which KPIs to choose?

The first point to recognise is that you should not be ‘stuck’ with whatever you have chosen. Make sure you (or someone easily available to you in your organisation) know what KPIs are delivered with your solution, how to change them and how to develop new ones. The information that is critical to you today may be of minor interest in six months’ time. For example today you may be concerned about cash flow whereas in six months’ time growth or profit may be more important.

The next point is that the KPIs of most importance to you depend on what your responsibility is within the organisation. A finance director is interested mostly in a wide range or finance indicators whereas the sales director is probably more interested in the pipeline and sales forecasts and the support manager is outstanding support cases or time to close cases.

A recent study undertaken by SL Associates of NetSuite customers also indicated that whilst certain KPIs were considered important by most organisations, different types of organisations benefited from tracking different KPIs. For example non-profit organisations were interested in Cost of Servicing the Mission and Cost of Servicing the Mission, manufacturing companies were concerned with Production Efficiency and Obsolete Inventory Carrying Costs and Service companies Availability and Utilization of Resources.

All the organisations were interested in 360° Visibility & Actionable Insights and measuring the improvement they had experienced in implementing a modern fully integrated ERP or business management solution.

The overall message seems to me to be: the KPIs your organisation will need will vary across the organisation and over time. These variations are driven by the differing needs of the stakeholders of the organisation, the issues that are most critical at any time and the type of business – which may change over time if your business expands into providing service or decides to outsource its product manufacture or warehousing.

Note: We can provide copies of the SL Associates KPI e-books if you complete our contact form. They are available for Wholesale & Distribution, Manufacturing, Retail, The Non-Profit Sector, The Services Sector and the Software Industry, just let us know which are of interest to you and we’ll email them. A General Business one is due to be released soon.

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Systems Integration – Things to consider

For most organisations there is no one software application product that meets all its needs. Even the most sophisticated and comprehensive ERP solution is likely to miss out on required functionality and often the best solution is to select an additional specialist or specific best of breed software application to be integrated with the ERP.

Having made such a decision the question is raised – what sort of integration is required? The tightness of any integration can be defined as of three broad levels:

• Level 1 – data is transferred between systems at given times
• Level 2 – two or more databases are synchronised regularly
• Level 3 – two or more applications share a common database

For some solutions a combination of levels is appropriate. For example, if integrating an eCommerce application with a generalised sales order processing and fulfilment package, one might use level 3 integration to share the stock and/or customer database, but level 1 integration for passing order details between the systems.

It might seem that level 3 is always best, but this is not the case and there are arguments for and against each degree of tightness.The actual choice made in any circumstance will be driven by a number of factors:

• What the organisation needs or wants to achieve;
• How important it is for the integration to be to maintain a real time view of data in both systems;
• How quickly the organisation needs/wants the solution;
• How open the application packages are in terms of publishing details, maintaining consistent published interfaces and advising developers and customers about significant technical changes made to their product;
• What is technically possible given the application packages to be integrated (often level 3 integration is not possible unless a solution is being developed – including an eCommerce solution);
• The budget or cost/benefit case.

One important issue that arises from this list is to make ‘openness’ a criteria when selecting an ERP solution, which can also be applied to the selection of any application package. Even if at the outset there is no requirement for integration, it is quite likely that during the lifetime use of such an application (five to ten years) some kind of integration will be necessary or desirable.

Security 101: What you should Know

The American retailer Target recently lost 110 million credit and debit card account numbers and customer data to hackers. What should your company do to protect your customer’s and your own data?

Teach Employees the Hazards of Phishing

The weakest link in security are your company’s employees. Thieves prey upon their curiosity and trust in people and businesses they know to trick employees into clicking on links that contain viruses. This is called phishing. The hackers send mail that looks like something official, by using the logo of a company they know or even the boss’s name.

Move everything to the Cloud

The cloud-service provider would lose credibility and customers if they allowed their systems to be hacked. So they deploy the best security software and hardware possible plus maintain teams who monitor their network and your applications 24×7. In addition to applications, you can use the cloud to store data instead of keeping it on local PCs. Examples of that are Google Applications and the Microsoft SkyDrive.

SSL

SSL means encryption. Train your employees how to recognize that a web site does not have a trusted SSL certificate. (The computer will tell them that; the employees needs to be trained not to ignore the warning.) Also train employees to never type passwords into sites that do not use SSL encryption as hackers can read that.

Do not Allows Employees to Connect Cellphones or USB thumb drives

Hackers gained access to US Military computers by leaving infected thumb drives laying around at coffee shops where a curious soldier picked one up and, violating policy, plugged in the thumb drive, thus allowing what should have been a secure network to be infected. The problem with smartphones and tablets is they can contain viruses that can infect your network when someone downloads photos or music onto your computers.

Erase your Computers Completely Each Year

Did you know that criminals rent networks of hacked computers so that other hackers can use them for criminal purposes? People usually do not know when a hacker has taken over their computer and is using it to hack into other sites. The only way to guard against this would be to assume you have infected computers and reinstall their operating system each year. Of course this is an administrative and logistical burden, but it does remove those computers from participating in crime.

Block Social Media Sites

Because most people have smartphones, there is no reason why employees need to use company computers to access Twitter and Facebook. Facebook in particular has had security issues. It lets people post links to infected sites. Block these sites. But do not block sites that employees need to do business.

Antivirus Software

The truth is that antivirus software does not work in all cases. The problem is it is reactive and not proactive. All it does is scan files and memory looking for known viruses; it cannot detect anything new. Save yourself money as the free software Microsoft Security Essentials is probably the best product on the market. It is included with Windows 8.

Outsourcing Security

Unless you are expert yourself, you should engage a third-party to monitor your network and desktop PCs. These people think about security all day and every day, so they are expert at that.