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7 Information Gaps That Hurt Your Business

November 10, 2017
By Simon De Brito
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7 Information Gaps That Hurt Your Business

Integration of data is vital to managing a prosperous trade specialty or construction organization successfully. Knowing your actual business performance at any given moment allows you to make more informed decisions to increase revenue and take your business to the next level. Here are seven critical ways that information gaps can hurt your business and cost you revenue.

1. Failure to Share Documents

Managing documents is often a challenge for industries that have to transfer information from one service to another. Communication between teams in the field and the office often rely on different data systems, and even pencil and paper at times, causing the need for duplication of entries and miscommunication. It also happens when trying to communicate information from the shop floor to the office.

ABIS, for example, takes away the re-do work necessary when manually tracking the materials processed every day at a Metal Building Company. Without an ERP system, the operator needs to write down the material usage and pass it down to a controller, who types it into their software. A client that we’ve worked with had four admins whose full-time job was to record and update the inventory system based on the operations ran in the shop a day or two before.

With the new system, the operators now scan and record every action performed, every piece of material used, which updates the entire information live in the system. The inventory count is accurately updated by the minute, and no one needs to re-enter data manually. This company saved so much time, they were able to relocate the four admins into more productive roles.

2. Poor Access to Critical Information

Your field representatives prepare detailed customer proposals for your customers, designed to solve their problems. For them to make a logical, realistic presentation requires that they have the knowledge needed quickly and efficiently.

Imagine that you are an Air Conditioner Company. You sell and install A/C systems at your customers' houses and businesses. This morning, your salesperson goes to a new business, lands a $15,000 installation, and sets the installation date two weeks later. On that date, the installation crew comes in with four brand new white A/C systems. Problem, the business wanted the systems to match their ceiling and walls color: cream. Your technicians have to return the equipment, set up a new date, and your relationship with your customer is off to a rocky start.

What happened? You're not even sure, and you don't really have any way to find out. Maybe your salesperson wrote the wrong information, or your admin misunderstood what was written down. Maybe the technicians picked up the wrong equipment, or your warehouse manager mistook two orders. Who knows.

With an ERP system, not only does every employee have access to critical information - which prevents mistakes from happening - you also have traceability and accountability. It allows you to pinpoint where the problem happened and take correctional measures to fix it.

3. Lack of Cooperation

Managing and executing a project that meets and exceeds your customer's expectations takes close work from everyone in your entire team. Sharing knowledge between all the key personnel and departments involved in a project ensures that they meet and achieve goals within the given constraints.

Lets take the example of a Metal Building Manufacturer. This company receives a Sales Order that is many pages thick. Some go to the Trim line, some go to Accessory line, some go to your Roll-Formers, and some go to Fabrication. This company has to send the entire order to  every department, and they have to comb through every page to find the pieces that are related to their work. It is fine if this order is somewhat organized, but it is not uncommon that the fabrication line has pages in the front... and in the middle, and also in the end. Not only is it cumbersome, but suddenly something gets missed and you need to go back and run a part for a job that should already be done. You are losing time, money, and you are getting frustrated.

With a construction software from ABIS, you have the ability to compartmentalize information so everyone only receives what they need to perform their job. Fabrication is granted access to the parts of the Sales Order related to Fabrication.  The Trim Line only sees the pieces related to trim, etc. This prevents mistakes from happening and creates a true collaborative environment where everyone can focus on their job.

4. Incorrect Labor Tracking

A significant issue in many businesses is inaccurate reporting of time by employees which, even if they are unintentional, can cost you thousands of dollars. Incorrect reporting of labor can also leave an organization open to costly legal actions.

With an ERP software, you can schedule your teams in the system and let them punch-in/punch-out directly from their phone or computer. You can assign human resources to production assets to make sure everyone is at the right post at the right time. It makes scheduling easy, giving you forecasting capabilities as well as KPIs (Key Performance Indicators) that reflect how effectively your employees' time has been utilized.

5. Inaccurate Data

Software that integrates an entire business ensures that the information you receive is precise and error-free. Accurate information gives you more control, improving your company's performance. No more incorrect last name spellings, no more duplicate entries for customer because each person enters their company name in differently.  Every department can select the correct customer lambda and associate information related to their job to this customer instead of creating a new entry.

Do you offer different pricing to different customers? Don't let them get charged retail price after your salesperson negotiated that 10% discount that tipped the balance in your favor. Your salesperson can attach the quote to this customer's profile and when it arrives to your billing personnel, they already know how much this new customer will be paying. Gone are the days where your office staff needs to talk back to your salesperson because the correct information is right in front of them.

6. Lost Documentation

A lean business runs without hiccups as a flawless machine. Everyone knows exactly what they need to do at every given moment and information is passed down from one service to another without interruption. No errors, no mistakes, no lost documents.

Sounds good, right?

Unfortunately, it is not the current situation of many companies. A good example to illustrate this situation is the case of a custom trim manufacturer. Customers request a custom trim piece for their new metal building and they need a piece of metal to be bent at a specific angle, with a specific length etc. Quite often, the customer and the manager will discuss it directly in the shop, and someone will draw the custom trim with the specification on a piece of paper to help visualize the outcome.

Two weeks later, this custom item goes on the production line and your production manager turns around and ask the dreaded question: anyone knows where we put that piece of paper? The conversation usually follows along those lines:

- Employee 1: "Oh yes, I passed it to Trim"

- Employee 2: "I remember, but I'm not sure where it is"

- Production Manager: "Well, where could it be? Did you staple it to the Sales Order?"

- Employee 2: "Yes, I think I did, let me look for it"

Employee 2 disappears for 20 minutes, looks in 3 different place, and finally finds the drawing, stapled to the Sales Order. The day is saved (this time) and the job can be processed. You know how else it could have happened? Like this:

Your Production Manager pulls out his phone or computer, looks up the customer's profile, and pulls out the picture of the drawing.

- Production Manager: "Here is the drawing we did with this customer 2 weeks ago, this is what we need to produce today"

It took him 2 minutes, no stress, no sweat, no anger, and everyone can perform their job uninterrupted.

Sounds good, right?

7. Delayed Financial Information

Integrated systems standardize information from every department, collecting and analyzing every transaction. Integrated business systems record and reflect financial and economic transactions immediately by systematizing data from every department.

Another perk of a having a system that records every transaction and every bit of financial information is that it gives you historical data. Some accounting systems hold data up to two years, ABIS has no limit. You can pull an invoice from 10 years ago if that's how long you've been using the system. Can you imagine how easily your audits would be with a system like this in your hands?

8. Inability to Track Expenses

Managers and business that can efficiently and accurately track expenditures can make informed, knowledgeable decisions, allowing you to reduce costs and maximize profits. It also puts your mind at ease with robust checks and balances.

What checks and balances? Let me show you a scenario.

A customer walks in your business and buys $5,000 worth of materials. They want to pay in cash and hand out the money to your cashier who works alone at that time of the day. The cashier puts $4,000 in the counter, $1,000 in their pocket, manually inputs a $4,000 order in the system and hands out $5,000 worth of material. Will you ever notice $1,000 is missing? Maybe. Maybe not.

An ERP system that is GAAP compliant puts those checks and balances in place for you. First, every transaction is audited. Second, every material is associated with a price. If an item is checked out of inventory and sold, so is the price value of the item. It would be extremely easy to check the system and ask your employee why this $5,000 piece of equipment was sold on February 19th for $4,000. The name of the person who moved the piece and processed the sale would also be written down in black in white.

This might not happen at your company. I hope it doesn't and that it never will, but an ERP gives you the peace of mind that it is impossible to trick the system you have put in place.

Conclusion

Operating your business so that it runs at maximum performance with minimum waste requires access to accurate and up to date informtation. An integrated system gives you control over project costs, productivity, and every aspect of your organization, filling the gaps in knowledge, and taking your business to the next level. To learn more about information gaps in your company, and how we can help you reach your ideal performance level, contact us today.

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About Author

Simon supports Marketing Operations at ABIS, Inc. We are making businesses smarter by automating their processes to gain productivity, increase margins and generate more profits.