Arizona Technology Leaders – What is the value of your solution?

Have you developed an outstanding solution for your customer based on your extensive knowledge of a business process or an industry and its related needs and pain points? This solution could take many forms including software applications, management services, integration services, consulting services and processing services to list just a few. The goal of each solution is usually to solve a specific problem and allow your customer to do more with less, reduce cost and complexity, do things faster, increase capacity and to make their life easier.

How do you measure the value of your solution?

An effective way of measuring the value of your solution is to identify and quantify resulting reductions in waste in a customer’s business processes. To create a framework for identifying waste, we’ll borrow from the definitions established by Toyota Chief Engineer Taiichi Ohno, father of the Toyota Production System (TPS). The principles of TPS have been implemented in many modern management practices including LEAN, Six-Sigma and Agile. LEAN focuses on the reduction of waste to improve overall customer value and increase flexibility and profitability. If you can demonstrate the benefits of your solution to your customer, then you can also show them how your solution increases the value they bring to their customers.

Taiichi Ohno identified seven different categories of waste in designing the Toyota Production System. The eighth category, Unused Employee Creativity and Talent, is a recent addition that recognizes that a company’s biggest asset is its employees.

  1. Non-Value Add Processes
  2. Defects
  3. Transportation
  4. Waiting
  5. Motion
  6. Inventory
  7. Overproduction
  8. Unused Employee Creativity and Talent

Non-Value Add Processes – Your solution may eliminate processes that do not add value to your customer’s business. Examples of such processes include multiple approvals and sign-offs, supervisor inspections of work product, redundant data entry across multiple systems, creating multiple copies of a document and document filing.

Defects – Your solution may reduce the number of errors that occur in a business process. Defects such as those not meeting a customer requirement are fairly obvious, but the actual defect rate and cost of correcting the defect across multiple departments and processes can be difficult to measure. Other defects that your solution may prevent

are errors in decision making due to incorrect or incomplete information and errors in execution due to unclear communication or confusion.

Transportation – Your solution may automate processes and improve workflow and reduce the costly transportation of people, documents or product. Always understand what documents a customer is currently using to control, track and report on a business process and how these documents are being transported. Amounts spent on transporting documents, including carrier charges, fax costs, courier services, and transporting people to review and approve documents, can be quite significant.

Waiting – Your solution may improve the velocity of a customer’s business process and reduce non-productive time. Waste is generated whenever a process is interrupted because it is waiting for an inspection or approval or when someone is waiting for a previous step to be completed before they can continue.

Motion – Your solution may reduce the need for costly status meetings by making information more readily available or it may reduce the cost of labor intensive scheduling activities. Waste is generated whenever energy is expended for the sole purpose of organizing, coordinating, administering or reporting. Solutions that automate each of these activities can increase the velocity and reduce the cost of a process significantly.

Inventory – Your solution may reduce your customer’s investment in assets and improve the speed that assets are converted to cash. Inventory is generally the result of either uncertainty or inefficiency. To accurately measure the cost of inventory waste you should broadly define inventory to include any stockpile – of product, unused business forms, unprocessed purchase orders, unapproved pricing requests or unread emails. Maintaining databases of redundant and often incomplete information across several departments and having more than one version of the truth is a common waste in many businesses.

Overproduction – Your solution may reduce the activity spent on creating more product than is required by its customers. In order to accurately measure this type of waste, broaden the concept of customers to include internal and external customers and expand your definition of product. Product should include both physical product and other items such as unused reports, redundant data accumulation, excessive email distribution and time spent on customer activity that is not billable.

Unused Employee Creativity and Talent – To be effective, your solution should reduce the pain points your customer is experiencing and also allow their knowledge workers to be more productive, innovative and happier in their jobs. Whenever an employee’s work activity generates or is limited by any of the seven types of waste described above, the business is not utilizing the skills and knowledge of the employee for optimal return. When your solution reduces waste and improves knowledge worker productivity, it also develops incremental capacity and capability for your customer that should be measured and recognized.

Demonstrating the value of your solution through quantified reductions in waste can help your customer justify their investment in your offering as well as develop a competitive advantage for your business. You can implement these measurement techniques into any stage of your sales process:

  • Qualifying, to quickly determine if there is a need,
  • Discovery, to match the solution to the need and develop the road map for viagra pas cher lille solving the customer problem,
  • Proposing, to demonstrate the value of your solution to the customer,
  • Closing, to justify the investment and protect the price point of your solution,
  • Implementing, to establish metrics for the successful implementation of the solution.

My mission is to help business owners succeed by taking the guess work out of improving profits, increasing cash flow and driving business value.

What difference would it make to your business if you could:

  • Trust your financial forecasts and understand your cash position?
  • Rely on your financial statements and be sure that your accounting is accurate?
  • Find cash from within your business to invest and grow?
  • Understand the financial and cash impact of an investment, a decision or other significant event on your business?
  • Have more time to focus on your customers and products and to lead your business?
  • Stop ending every month in a panic?

I am passionate about working with owners who are committed to increasing the value of their business. Many of these owners are burdened by financial processes that don’t accurately report on the past or predict future cash flows and that are challenged in bringing value to managing business performance and decision making. They’re frustrated by surprises, a lack of actionable information, inconsistency and not understanding results. Most importantly, these business owners will actually do something about these problems. They want to make the right decisions to grow their business, to improve operational performance, to increase cash flows and to build a stable financial platform on which to grow the business – all of which drives business value.

Do you need help in implementing financial processes that will increase the value of your business and improve operational performance? Would you like help in developing a process to demonstrate the value of your solution to your customer? If you would like to learn more about my services, please send me an Email or call me at 480-433-1310.



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