ACTIVITY BASED BUSINESS INTELLIGENCE
Results Business Management Activity Based Management models will provide you with a rich source of information about the business, how it works and why things cost what they do.
The core belief is that customers consume products/services, products/services consume activities and performing activities consumes resources and create costs. Using this demand or “Pull” methodology, Activity Based Management moves the business from being a cost focussed to an activity focussed business. You will get to understand which products or customers are putting the greatest demand on your business, often with surprising results. As you gain rich business insights to how much it is costing to perform activities and processes, Activity Based Management (business intelligence) will stimulate a wide range of strategic discussions.
Results Business Management will go through your product range and identify which ones make you money, which ones don’t, which ones are “stars” and which ones are “dogs”
It is possible that your top selling product may not be making the profit you think it is, as it creates costs that are not taken into account using traditional costing methodologies. It is also possible that 80% of your products are only making 20% of your profit but creating lots of activity in your business. If your sales are going up but your profit is not, then it is time to look at your product profitability. Using the outputs from an Activity Based Cost model, Results Business Management will be able to show you which products make the most profit and provide you with important information so you can make informed product management decisions.
Results Business Management will analyse your customer base to determine which ones are making you the most profit which will give you an edge when going into commercial discussions.
In a competitive business environment, it is a critical part of your negation plan to know how much you can give away before you start making a loss on the customer. Understanding what you can trade off to preserve customer profitability is vital eg., you might trade off a price reduction for a reduced number of deliveries, the latter reducing your delivery activity cost. Using outputs from an Activity Based Management model, Results Business Management will be able to identify how customer behaviour is impacting the costs of your business which can then be used to get a “win win” outcome from your commercial negotiations.
COMMERCIAL VIABILITY ASSESSMENT
Results Business Management believe that through creating a business model which estimates likely success you can make informed decisions before you invest in developing a new revenue stream .
Results Business Management will model the Marketing, Operational, Technical and Financial feasibility of developing the new revenue stream and develop a financial forecast. Based on the forecast there are two questions to answer before committing to the investment 1/ is the revenue stream going to be profitable, 2/ is the revenue stream going to provide you with a worthwhile Return on Investment. Results Business Management business modelling will provide you with the information to answer both these questions. It will show you the risks involved, the impact on the viability and ROI and give you risk management tools such as Breakeven Analysis.