Hidden Profits Blog

Finding the Gold in Your Business

Hidden Profits Author:

Lynda J. Roth

As the president and founding partner of Woodland Hills-based LJR Consulting Services, Lynda advises clients on ways to improve profitability and productivity through both technology and business processes. She also works with companies and private equity firms on the role of information technology in mergers and acquisitions.



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Creative Thinking and the Lean Company

Filed under: Creative Thinking, Information Technology, Uncategorized, business process, lean accounting — Lynda Roth at 1:18 am on Friday, June 25, 2010

I am reading a new book by John C. Maxwell entitled ‘How Successful People Think’.  An intriguing title.  If you are not familiar with John C. Maxwell he is a very dynamic speaker, and an expert on Leadership.

 Available on Amazon tinyurl.com/25pp34c  

One of the chapters in the book is about Creative Thinking.  Maxwell quotes Annette Moser-Wellman the author of ‘The Five Faces of Genius’ who states ‘The most valuable resource you bring to your work and your firm is your creativity’.  Maxwell states ‘Creative thought isn’t necessarily original thinking. Most often creative thinking is a composite of other thoughts discovered along the way.’

When I read the chapter, I thought about how so many companies either do not take on projects like lean process design that require new thought or engage in those projects and don’t see any benefit. There is much written about why projects fail and what is required to be successful and in all of those numerous articles I have not seen ‘Creative Thought’ as one of the requirements for success or lack of creative thought as one of the reasons for failure.  However, after reading and thinking about the chapter, I believe it just might be the key ingredient for success.

Maxwell listed the following as characteristics of creative thinkers.

  • Value Ideas - this is a requirement for a lean project and you need many ideas for improvement
  • Explore Options - also key so the team can explore multiple ways to perform the process
  • Embrace Ambiguity - certainly when a team is initially evaluating how to ‘lean’ a process there is much ambiguity on exactly how things will be done, what technology might be available to lean the process and how it would all be implemented.
  • Celebrate the Offbeat - in order to get to a truly different process that saves time and cost, the team must think out of the box and brainstorm.  Some of the ideas will seem way crazy but may have merit.
  • Connect the Unconnected - so often in evaluating how to make a process more efficient the team needs to consider process steps that are not normally connect to the process being evaluated.  For ex. When a company looks at Accounts Payable, what really needs to be addressed is the entire Procure to Pay process which may address areas not normally connected in the company.
  • Don’t Fear Failure - a team must try multiple options and ask many questions before finding a satisfactory revised process.  Some of the options may not work, also the new process will probably be improved again at a later time. Don’t be afraid to try and revise.

Maxwell’s list on How to Discover Creative Thinking is a primer for companies who want the get the most from employees and provide an environment in which employees feel valued and motivated to improve the business.

Remove Creativity Killers - in most companies today creativity is dead and buried.  The most important role for executive management is to remove creativity killers and create an environment that encourages creativity.

Think Creatively by Asking the Right Questions - This is a key skill to teach employees who are team members on a lean project.  The right questions are those that stretch the mind beyond the obvious.  Too many lean projects fall short because team members only ask the obvious questions. 

Develop a Creative Environment - having an area where the lean teams meet and have tools just for the lean process that enable them to explore ideas, put them on paper and move components around is very conducive to creative thought.

Spend time with other creative people - not only do you need creative thinkers from your team, the project will greatly benefit from outside team members.  These may be consultants, representatives from customers and vendors, representatives from key advisors like banker and accountant. These people bring a totally different perspective and insight on what other companies do to a lean project and business process re-design.

Get Out of Your Box - to me that means not only thinking outside the box but looking at how other more efficient companies perform the same processes, technology that might be available to enable a change that could not happen without the technology.  For example, a company in which employees are not near a computer in the course of their job, may resist performing functions that require entering or manipulating data on a computer.  However, with smartphone, iPads and the internet, applications can be created in which access to a workstation or laptop is not requried to use the technology.  You can also apply generally accepted processes from one area of the company or industry to another process.

So bring Creative Thinking to your Lean Projects. 

If you would like to spend time with other creative people - Call LJR Consulting Services for a free consultation  818-227-5025

 

 

 

SaaS Is It For YOU?

Filed under: ERP Selection, Information Technology, SaaS, Software as a service, Uncategorized — Lynda Roth at 1:02 pm on Tuesday, June 15, 2010

This morning I received a white paper about evaluating SaaS - Software as a Service solutions.  This has been a question that many clients have been asking in the last couple of years and one that I addressed for my own business.  There has been so much written lately about SaaS and it has been touted as the perfect solution for everyone.  Is it really?  I am not saying that it does not have its place in the smorgashboard of software options and it certainly provides numerous benefits but as the white paper points out, you must evaluate it objectively against all options and weigh which criteria are most important to your company.

The white paper is entitled ‘Evaluating SaaS Solutions: A Checklist for Small and Mid-sized Enterprises’ you can download it here tinyurl.com/2ua6qtd

The key evaluation criteria listed in the white paper are:

  • Solution Functionality which includes
    • Core system functionality
    • Customization and personalization capabilities
    • Integration capabilities
    • Workflow capabilities
    • Access to data for ad-hoc analysis and reporting
  • Solution Pricing Terms & Condiditons
  • Uptime availability, quality of service and responsivenes of the SaaS provider - in short the Service Level Agreements (SLA)
  • SaaS solution’s security and privacy
  • SaaS solutions backup and recovery capability
  • Saas solutions customization and personalization capabilities
  • Saas solution’s integration capabilities
  • Saas solutions workflow capabilities
  • Saas Solution ability to provide access to data for ad-hoc analysis and reporting
  • Existence of a community of SaaS solution users for networking and collaboration

I would add 2 other criteria to their list. 

1.  The ability to convert data from the SaaS system to a different system.  As the business grows or needs change there may come a time when the company decides they want their applications in-house.  What are the options for converting data from the system and loading it to a new system.  Included in this would also be what happens if the SaaS provider is sold, terminates operations and/or no longer supports the system. 

2. The technology platform.  While it is somewhat true that by definition a SaaS system will be on supported data base, programming language and operating system, that cannot be taken for granted.  Some software firms have created their own data base and/or programming language that would require dependence on the software firm or may end up obsolete in the near future.  For example several years ago I hosted my website with a company who at the time had a very state of the art editor so I could change my web content easily.  However, with the advancements today in web editors, my hosting company has fallen behind and I am now looking to move.  While this cannot be completely avoided as technology changes very rapidly, it should be a consideration just as it would be for a purchased application.

Today the selection of core business applications such as ERP, CRM, MRP are very much like selecting a long term partner.  The process should not be taken lightly weather searching for a SaaS, purchased or hosted solution.  Detail requirements need to be defined, potential solution options identified and evaluated against the requirements.  Since this is a critical decision and not something companies address on a regular basis, I strongly suggest bringing in a consultant experienced in system requirements, evaluation and selection to support your team. 

 

The Corporate Crash Diet - when reducing cost and laying off staff becomes unstainable

Filed under: Information Technology, Uncategorized, business process, finance department, lean accounting — Lynda Roth at 10:35 am on Tuesday, June 1, 2010

Have you gone on a corporate crash diet in the last couple of years.  After the binging in the early 2000’s and the financial collapse in 2008, many companies felt it necessary to put themselves on a crash spending diet.  So what do I mean by that.  They did one or more of the following;

  • Reduced staff corporate- wide by 10%, 15%, 20%
  • Halted all spending on marketing, training etc.
  • Halted all capital spending on improvements, acquisitions, product development

So now it is almost 2 years later and the problems from these actions are starting to be felt.  These actions were taken to preserve the company but now the results may very well have put the company on an unsustainable path. Why does this seemingly correct response become unsustainable.  Frequently this creates a downward spiral in which

  • Customers become unhappy because service suffers
  • Employees become unhappy because of increased workloads and overtime
  • Productivity suffers because of increased workloads
  • Sales suffer because of lack of marketing and the above results of downsizing

Or the second scenario is that the company weathers the storm and sales come back company starts to grow and now they begin hiring again because they are short handed.  The end of this scenario is that they have brought all the cost back that was shed and now they are vulnerable to the next downturn.

A better approach and one that will lead to sustained improvement is to evaluate all business process and systems.  Determine where there is waste and inefficiency and quantify the impact to profit and cash flow of eliminating or reducing the waste and inefficiency.  Often by identifying and implementing these sorts of targeted cost reducing strategies not only are the costs in the business reduced to be in line with the economic conditions, but the company becomes stronger and more competitive.