{"id":41447,"date":"2020-08-27T12:09:23","date_gmt":"2020-08-27T19:09:23","guid":{"rendered":"https:\/\/www.enxmag.com\/twii\/?p=41447"},"modified":"2020-08-27T12:19:34","modified_gmt":"2020-08-27T19:19:34","slug":"what-numbers-say-the-analytics-behind-margin-management","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/feature-articles\/2020\/08\/what-numbers-say-the-analytics-behind-margin-management\/","title":{"rendered":"What Numbers Say: The Analytics Behind Margin Management"},"content":{"rendered":"\n
\"\"<\/figure><\/div>\n\n\n\n

There\u2019s a 60-year-old Peanuts comic strip that really speaks\nto the age of data analytics. In the strip, Linus is poring over some of the\nmore telling numbers behind the ineptitude of Charlie Brown\u2019s baseball team. \u201cI\nthink you\u2019ll find,\u201d Linus prefaced, \u201cthat (the statistics) say something to\nus.\u201d<\/p>\n\n\n\n

He continues, \u201cLast year our opponents scored 3,040 runs to\nour six! They made 4,900 hits to our 11 and they made 19 errors to our 300.\u201d<\/p>\n\n\n\n

Poor Charlie Brown was neither amused nor enlightened. \u201cTell\nyour statistics to shut up!!\u201d he shot back.<\/p>\n\n\n\n

Truth is, the eternally downtrodden pitcher did not need\nstatistical backup to confirm what he already knew\u2014his baseball team was a\ncomplete and utter failure by any objective measure. And this strip was set a\ngood 25 years before the advent of sabermetrics, which in the last 15-20 years\nhas truly devised a mountain of statistical information intending to granulate\nperformance in baseball and other sports as well. <\/p>\n\n\n\n

The Voice Behind\nNumbers<\/strong><\/p>\n\n\n\n

To Linus\u2019 point, what do statistics tell us that we don\u2019t\nalready know? Many of the numbers tend to reinforce what we can plainly see on\nthe playing field. But for those of us who are not always watching or are\nbiased by past performance, both good and bad, advanced metrics can remind us\nthat all things can (and do) change.<\/p>\n\n\n\n

The correlation with business is obvious, and when a\npandemic is thrown into the mixture, past performance is no longer a key\nindicator for monthly or quarterly projections. Constantly taking the fiscal\ntemperature of your business is the best method for recognizing downward\ntrends. Rectifying a negative development is another matter altogether.<\/p>\n\n\n\n

As we close out August\u2019s State of the Industry report on\ncountering margin erosion, we asked our dealer panel about how they use data\nanalytics to keep a short leash on margin performance.<\/p>\n\n\n\n

\"\"
Brad Yocum, Function4<\/figcaption><\/figure><\/div>\n\n\n\n

Brad Yocum, market director for Function4 of Sugar Land,\nTexas, notes his dealership constantly monitors the profitability of the products\nand services in order to adjust pricing as needed. \u201cThese metrics are also\nbeing used to make sure that we are staffed properly and need to reallocate\nresources to areas that are in need,\u201d he said. \u201cWe\nalso assist customers in building these same types of tools from their\ninformation that may be located in several different areas.  <\/p>\n\n\n\n

\u201cToday, it is\nmore important than ever that companies make good decisions to provide their\nbusinesses with the right information to be prosperous going forward.\u201d<\/p>\n\n\n\n

Team Effort<\/strong><\/p>\n\n\n\n

Woodhull LLC of\nSpringboro, Ohio, relies on e-automate and CEO Juice to help generate a wide\nrange of financial reporting. CEO Susie Woodhull notes her company\u2019s management\nbonus program issues goals for a number of operational metrics that reinforce\nand ensure the dealer\u2019s margins are being managed across the board.<\/p>\n\n\n\n

\"\"
Susie Woodull, Woodhull LLC<\/figcaption><\/figure><\/div>\n\n\n\n

\u201cFor our service\nmanager to know what are receivables are and what our days sales outstanding\nare, that\u2019s great,\u201d she said. \u201cBut it\u2019s also important for a warehouse manager\nand the administrative manager to know what our incompletes are and where we\u2019re\ntrying to keep that in line.<\/p>\n\n\n\n

\u201cFor me, with\nthat incompletes statistic, I can run a whole department on that. It tells you:\nis the tech trained? Do they know what they\u2019re doing? Is the customer getting\nserviced correctly the first time? I think analytics are important, but I feel\nit\u2019s a question of what analytics are you watching that helps you manage the\nbottom line.\u201d<\/p>\n\n\n\n

\"\"
Chip Miceli, Pulse Technology<\/figcaption><\/figure><\/div>\n\n\n\n

Numbers are vital, but most executives do rely on experience and\nintuition in gauging the market and potential for a shift in client needs and\ndemands. Count Chip Miceli, president and CEO of Schaumburg, Illinois-based\nPulse Technology as one of them.<\/p>\n\n\n\n

\u201cI have a software program that gives me updates, sales- and\nprofitability-wise,\u201d he said. \u201cBut I have a sixth sense for that kind of\ninformation and rely on intuition and my industry knowledge as well.\u201d<\/p>\n\n\n\n

\"\"
Melissa Confalone, Fraser AIS<\/figcaption><\/figure><\/div>\n\n\n\n

For Fraser Advanced Information Systems of West Reading,\nPennsylvania, its leadership team focuses on analyzing its financial position\nmonthly on both the hardware and aftermarket ends, according to Melissa\nConfalone, vice president of sales.<\/p>\n\n\n\n

\u201cWe also regularly\nmeasure and analyze aftermarket gross profit on our largest clients to find\nmonthly trends or red flags,\u201d she said. \u201cThis allows us to proactively address\nany issues and adjust strategies as needed.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

There\u2019s a 60-year-old Peanuts comic strip that really speaks to the age of data analytics. In the strip, Linus is poring over some of the more telling numbers behind the ineptitude of Charlie Brown\u2019s baseball team. \u201cI think you\u2019ll find,\u201d Linus prefaced, \u201cthat (the statistics) say something to us.\u201d He continues, \u201cLast year our opponents scored 3,040 runs to our six! They made 4,900 hits to our 11 and they made 19 errors to our 300.\u201d Poor Charlie Brown was neither amused nor enlightened. \u201cTell your statistics to shut up!!\u201d he shot back. Truth is, the eternally downtrodden pitcher did not need statistical backup to confirm what he already knew\u2014his baseball team was a complete and utter failure by any objective measure. And this strip was set a good 25 years before the advent of sabermetrics, which in the last 15-20 years has truly devised a mountain of statistical information intending to granulate performance in baseball and other sports as well. The Voice Behind Numbers To Linus\u2019 point, what do statistics tell us that we don\u2019t already know? Many of the numbers tend to reinforce what we can plainly see on the playing field. But for those of us who are not always watching or are biased by past performance, both good and bad, advanced metrics can remind us that all things can (and do) change. The correlation with business is obvious, and when a pandemic is thrown into the mixture, past performance is no longer a key indicator for monthly or quarterly projections. Constantly taking the fiscal temperature of your business is the best method for recognizing downward trends. Rectifying a negative development is another matter altogether. As we close out August\u2019s State of the Industry report on countering margin erosion, we asked our dealer panel about how they use data analytics to keep a short leash on margin performance. Brad Yocum, market director for Function4 of Sugar Land, Texas, notes his dealership constantly monitors the profitability of the products and services in order to adjust pricing as needed. \u201cThese metrics are also being used to make sure that we are staffed properly and need to reallocate resources to areas that are in need,\u201d he said. \u201cWe also assist customers in building these same types of tools from their information that may be located in several different areas.  \u201cToday, it is more important than ever that companies make good decisions to provide their businesses with the right information to be prosperous going forward.\u201d Team Effort Woodhull LLC of Springboro, Ohio, relies on e-automate and CEO Juice to help generate a wide range of financial reporting. CEO Susie Woodhull notes her company\u2019s management bonus program issues goals for a number of operational metrics that reinforce and ensure the dealer\u2019s margins are being managed across the board. \u201cFor our service manager to know what are receivables are and what our days sales outstanding are, that\u2019s great,\u201d she said. \u201cBut it\u2019s also important for a warehouse manager and the administrative manager to know what our incompletes are and where we\u2019re trying to keep that in line. \u201cFor me, with that incompletes statistic, I can run a whole department on that. It tells you: is the tech trained? Do they know what they\u2019re doing? Is the customer getting serviced correctly the first time? I think analytics are important, but I feel it\u2019s a question of what analytics are you watching that helps you manage the bottom line.\u201d Numbers are vital, but most executives do rely on experience and intuition in gauging the market and potential for a shift in client needs and demands. Count Chip Miceli, president and CEO of Schaumburg, Illinois-based Pulse Technology as one of them. \u201cI have a software program that gives me updates, sales- and profitability-wise,\u201d he said. \u201cBut I have a sixth sense for that kind of information and rely on intuition and my industry knowledge as well.\u201d For Fraser Advanced Information Systems of West Reading, Pennsylvania, its leadership team focuses on analyzing its financial position monthly on both the hardware and aftermarket ends, according to Melissa Confalone, vice president of sales. \u201cWe also regularly measure and analyze aftermarket gross profit on our largest clients to find monthly trends or red flags,\u201d she said. \u201cThis allows us to proactively address any issues and adjust strategies as needed.\u201d<\/p>\n","protected":false},"author":166,"featured_media":41448,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1650,82,87,1638],"tags":[2738,3588,3521,359],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/41447"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/166"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=41447"}],"version-history":[{"count":1,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/41447\/revisions"}],"predecessor-version":[{"id":41449,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/41447\/revisions\/41449"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media\/41448"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=41447"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=41447"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=41447"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}