A large Ukrainian manufacturer. The sales managers’ motivation is based on the income (commonly called “turnover”). They regulate the discounts manually or based on a certain set of rules, say, never beyond UAH 15,000, 15%, or 15 liters. As for the actual gross profit, it is tracked only post factum when the data analysis for the business is done, and summed over the whole “bunch”.

Do you remember the story of the door selling chain that made more money selling door handles? This situation is very similar to that one, only on a massively greater scale.

EFFICIENCY OF A MANAGER’S WORK AS PART OF A BUSINESS ANALYSIS

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Well, here’s a manager who works his socks off all month and does sales of huge amounts, demands an embarrassingly big turnover bonus in the end of the month, but the profit he brings is nothing to speak of. This happens because he sells non-marginal items, grants discounts, and eventually drains off the whole margin.

And there’s another one who completes 10 transactions but brings 5 times as much gross profit.

To be fair, a gross profit report normally takes a very long time to prepare. And it isn’t always demonstrated to the managers. But even if it were demonstrated, what would they make of it? It only contains the total sales in the area versus the analytical dashboard for management.

WHAT WILL THE ANALYTICS GIVE THE COMPANY

Our dashboard allows the managers to keep track of the gross profit they have brought in every day, and to see their place overall.

In a BI system, the sales managers can monitor the gross profit by transactions, by areas of sales, and by particular goods. And this means that every manager understands what is more profitable to sell for them (and for the company), how much they should sell, and how they increase their financial results. And also, this encourages competition among the staff!

Now the company is changing the managers’ motivation from turnover to gross profit and planning to build up 2-3% of gross profit this way. And you do know, dear friends, this is really a helluva lot. If you are interested in an opportunity of setting up interactive reporting, please contact us.

Read more about BI dashboard for management: POWER BI IMPLEMENTATION SYSTEM
Here’s an article about why BI shouldn’t be confused with IT: A BI SYSTEM ≠ IT: WHY IS IT SO?

BUT THE MAIN POINT OF THE ANALYTICS IS
PROFIT GROWTH

Our dashboards give you a chance to control the revenue, cost price, margin, gross profiе and 47 other indicators on a daily basis. No need to wait for a monthly report.

Consistent control results in profit growth and business expansion.

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