John Breakey
CEO of GeNUIT and developer of Promys, professional services automation software for technology integrators developed by a technology integrator.
As CEO my three biggest fears are:
- not knowing with some certainty what the next 3 months performance (revenue, utilization & cash flow) will be
- being ambushed by numbers that were different than I was told would happen
- missing opportunities where if I’d had information sooner I could have acted to change those outcomes.
Predicting the future: Too much emphasis is placed on monthly or quarterly financials as a tool to run a business and not enough on predictive or forecasting tools. Month end financials are essential for investors and banks but they are fundamentally historical documents. Changing the past is not possible.
What I can control and impact is the future but I need to know what the future is going to look like so I can decide if intervention is required to change an outcome. If we want to hit company targets this month and this quarter then having reliable forecasting tools; such as the professional automation software (PSA), that express information in terms of margin, cash flow and utilization are really important. We were typical of most companies in that we used lots of manual, disparate systems to forecast. The trouble was the data was seldom current and often based on manager’s opinions, isolated to their specific areas (sales, deployment, service, etc). Too frequently this translated into inefficient hand-offs between departments which lead to big variances and gaps between business process stages.
By the time we were pushing $15 million in revenue we got serious and focused on making predictive forecasting better. We saw each step from quoting, orders, delivery, implementation and managed services as a continuance chain where managers needed to have visibility to the activities and forecasts of those things in front of them that could impact their future.
But we also needed the information to be real time so that management could constantly monitor the current actual performance against the original forecast. That’s when we replaced several separate systems and Excel spreadsheets with one homogenous professional automation software (PSA) system that could give us the real time reporting and forecasting we needed. Along the way we significantly reduced duplication of effort thus improving workflow and again positively impacting the accessibility of current information.
The result was more accurate forecasting of our most important KPI’s and far fewer swings between our forecasts and actuals. We had taken a lot of the guesswork out of the system and that added to the accuracy.
Less Ambushes: Ambush is a term I use when I am told that this month or next month is OK and it turns out to be wrong. If I know things are not looking rosy I want the chance to do something about it. Improving our system of forecasting and linking it to current data did 2 things: it improved the manager’s forecasting process; and it gave me the ability to go into the system anytime so I could audit what was being told to me by seeing the source details directly.
Now the only thing that keeps me awake at night is my neighbors’ cat. If you have any suggestions let me know.
