I was recently speaking with Bob, the COO of a mid-size technology solution provider.  One of the biggest challenges Bob routinely faces, is when he get’s blind sided by departmental issues he didn’t see coming (and his department managers didn’t see coming either).

A bid that was forecasted to save the quarter comes in at half it’s predicted value, what was supposed to be the most profitable project in company history is now a money loser, or their second biggest customer is moving to another vendor, and Bob didn’t even know they were unhappy.  Moments after getting this kind of information the phone usually rings, it’s the CEO asking Bob “Why wasn’t I given the heads up before now? Did you know about this?  What the ‘bleep’ is going on here…?!?,”

Getting blindsided happens to everyone, but it’s a lot more common in companies that are growing.  Every time the company adds another employee, another line of business, another office location, informal feedback loops that worked o.k. when the company was starting out, start to break down.

As the company grows senior managers become less and less involved in the day to day business transactions (quoting, project deployment, customer support) and so keeping their fingers on the pulse of the business becomes harder and harder and employees are often reluctant to share bad news until it’s too late.

This is compounded by the second growth problem, that the sales, project delivery, customer support and financial data and reporting become more disconnected, silo’d and out of date.  Real-time proactive visibility turns into reactive, outdated, partial visibility. Managing operations starts to become like trying to cross a busy street late at night, when the street lamps keep going out every ten seconds.  Except for many COO’s, being hit by a car sometimes seems like it would hurt less and be easier to recover from.

Unexpected things happen, but with early warnings and visibility, at least you’d have a fighting chance to change the outcome.  Even when you can’t change the outcome, early visibility would at least allow you to make proactive adjustments to minimize the impact, deferring purchases to better protect cash flow, or meeting with a customer to address their concerns.

Here are three most common areas where COO’s get blindsided:

Sales Forecast Blindside

Spread sheet forecasting, or manually updated CRM Opportunities (when new quote versions change the forecasted deal value) are often the culprit here.  The average sales rep is working on anywhere from 5-25 deals at any given time, each deal goes through 3-5 quote revisions per deal. That’s 15-125 manual updates the sales rep has to make to the sales forecast if they want it to be accurate.  Multiply that by 2, 5 or 10 sales reps and the likelihood of the overall sales forecast being accurate at any given time approaches zero very quickly.

Depending on the criteria you want to use for sales forecasting, the other problem is that data may be stored in several different places/systems. For example, if you wanted to forecast sales rep quota achievement based on margin, you might want to combine “committed” forecasted opportunities (signed in blood by the rep to come in this month/quarter) with bookings (closed business not yet delivered) along with invoiced margin dollars.  The problem is, the Opportunity data (which we already agreed may not be accurate) is in a spreadsheet or your CRM, the bookings data is in a file folder, or in your Project Management/time sheet software, and invoices are in your financial accounting system.

It’s way too time consuming to consistently aggregate all the sales data from those different systems and so it only happens once a week or once a month, and now we’re back to trying to cross the street with lights going out every 10 seconds and hoping you don’t get blindsided.

Project Margin Blindside

Tracking project profitability in a spreadsheet, or even in a standalone PM tool can be a real challenge.  The original project budget and estimated margin are in the project quotation (quote version 1.x), the actual materials & equipment consumed are in Procurement, in-house actual labor hours delivered are in time sheets, except for subcontract labor, which is back in Procurement. Not to mention tracking internal and external change orders.

Because of these disconnects, many companies don’t find out if their projects hit their target margin (or not) until days or weeks after the project has closed and it’s too late to make any changes that could have avoided a negative outcome.  Is it any wonder that many PM’s suffer from high blood pressure trying to bring projects in not just on budget, but on target margin?  In fact, a fair question to ask is, “is it really fair to hold PM’s accountable for hitting project target margins, if we can’t give them the visibility they need to accomplish that goal consistently”.

And if you’re really committed to avoiding project margin blindsides in the future, don’t forget about about cycling implementation lessons learned back into the quoting process.

But just like the sales forecasting data, collecting the project data from all those disconnected systems means it only happens periodically, and so the VP of Services and the Sales Manager are now both dodging traffic hoping they don’t get blindsided.

Lost Customer Blindside

As COO, if your phone rings and it’s a customer, they’re hardly ever calling to congratulate you on what a great job your company is doing.  Worse than that, most customers don’t call, they just leave.  Once they’ve made the decision to go (and you finally do find out), it’s almost always to late too address their concerns and get them back.  If only you’d had some advance visibility that they were unhappy and that things were not going as planned, you might have been able to intervene and change the outcome.

The challenge is, most help desk automation is focused on helping technicians track and resolve individual tickets, not on bringing executives into the loop proactively when customer service expectations or service levels are not being met.  In addition, your company’s support performance and customer value perception is being measured against Managed Service contracts, pre-paid blocks of hours shared between Project and Support work, RMA turnaround time, and Time & Materials support work performed.  Gathering and tying all that information together is a challenge, but if you really want to know how you’re performing overall for your customer, that unfortunately is just the tip of the iceberg.

Because if you really did want to collect a “holistic” view of all of the information related to a customer, you’d now have to combine all of the Sales, Project and Help Desk data outlined above.  Yes, playing in traffic in the dark, might be easier and maybe even a little more fun. BUT, the good new is, it doesn’t have to be that way.

How to avoid getting Blindsided

The first step to avoid being blindsided, is your executive team has to acknowledge that the individual departmental software and spreadsheet approach that got your company to where you are today, will not take your company to the next level.

At it’s core, getting “blindsided” is really the result of growth (a good thing) that has now outstripped an informal feedback loops ability to keep up.  And so now, instead of the senior executives getting that real-time visibility into the pulse of the business by being involved in every transaction (no longer possible), they need enterprise business software that will automate and manage ALL of those operational transactions in single place and proactively notify them with exceptions that require their intervention or attention.

Having all the operational business data in once place also allows for aggregate reporting across departments, which will highlight trending and allow lessons learned to be cycled from one department to another.

If you’d like to put a stop to COO blindsides, and help your department managers avoid the same fate, you can find out more about the different enterprise business/PSA software options available today and which one is the best fit for your needs by downloading the PSA Software Buyers GuideDownload the guide here.

 

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