• Blackbox Inisghts

Can These Metrics Diagnose My Business Problems?

Data is king. Now it is the big data era. We have been hearing all these right?


And, many companies have started hunting for data, collecting a lot of data, but somehow it did not help them to solve their business problems. How come? Is the data not useful?


According to SAP, only 1% of data is being utilized and turned into benefits. What it means is data is there, but we do not know how to use and interpret the data.


Now, let’s use some scenarios and see how we can put data into good use.


There are 3 shops - Shop A, Shop B and Shop C. They faced similar issues in their businesses:

  • Their sales dropped from RM150,000 to RM100,000 per month.

  • Their Net Promoter Score (a measure of customer satisfaction and loyalty) dropped from 95% to 85%.


They needed to find strategies to solve this issue. Imagine if you are their business consultant, how would you advise them?



SHOP A

Their profit margin seems ok. One issue spotted here is their order fulfillment rate is only at 75%. This is most likely to be influenced by their delivery speed and inventory management. What we can see from the table is that % of their orders delivered on time is lower than the other shops.


From here, we can deduce that Shop A has issues with their delivery speed. They should look into how they manage their delivery - how to increase delivery efficiency or perhaps they could even outsource it to delivery companies.


SHOP B

Given the same issue with Shop A, which is the order fulfillment rate at 75%. However, their out of stock frequency is pretty high which is 50%.


That shows that there are problems with how they manage their inventory. They need to diagnose deeper into why they are always out of stock. Suppliers have no stock? Unable to forecast the demand? Delay in getting order data? Miscalculation of stock volume?


SHOP C

It seems like their inventory management and delivery process are maintained at a healthy level. However, their profit margin is on the low side, around 60%. This shows that the product lines they have may sell very fast, but they are not earning as much.


They need to look into planning their product range, perhaps could consider selling more high end products or products with higher profit margins.


A drop in customer satisfaction also may indicate other underlying issues in the operations besides inventory and delivery, which could be diagnosed with other metrics like customer churn rate or simply by calling the dissatisfied customers to find out the issues.


From these examples, we could see that even businesses with the similar problem, which is sales drop, unable to fulfill customers expectations, could arise due to many reasons like inventory management, delivery speed, customer service level, product range or website speed.


With the right data, only we are able to know what’s the root cause and take the right actions to boost business performance.


To diagnose your business problems, it is important for you to set the key metrics that are important for your business. And, monitor it as frequently as you can. So you could act on the problems quickly to minimize your business impact.


If you have business problems, don’t suffer in silence. We all do have problems. Let data help you - let’s explore BI Solutions like Performance Plus by Blackbox to help you present your metrics in easy-to-understand graphics with real time data.