Be On The Alert

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• September 2007 Issue
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From the Sept. 2007 Issue

When it comes to taking our business operations to the next level, we can all learn a little from Emeril, the Food Channel’s very animated chef. When he shouts, “BAM!” he’s reminding you about an important cooking technique he just taught, and now your taste buds are anticipating a treat. It’s an effective tool. In business, we too need tools that keep us on track, keep us informed and enable us to better serve our customers, employees and companies. We need a BAM! And as it turns out, we actually have one: Business Activity Monitoring.

This BAM is a subset of Business Intelligence (BI) tools, and it includes a cool choice of “alert type tools” that can keep you up to date on the vital signs of your business, or what the industry calls “Knowledge Management.” It assures you that critical information is getting into the hands of those who need it regardless of where they are in the company. You’ve likely already seen some of the benefits in your use of Outlook with its pop-up reminder regarding an upcoming meeting. BAM takes this to the next level.

Distribution Company Case Study

Consider the case of the distribution company where the key to profitability was the management and fine tuning of its product pricing model. It turns out that some overzealous sales reps were pricing goods too close to cost, and, even though sales were up, they weren’t making it up on volume. The answer was a business alert, sent each time zealous Zelda or anyone else entered a quote or order with a product margin below a set percentage.

Think Alerts. Its part of the evolving approach to improving business processes, much like the Think CRM I covered earlier this summer in my June/July 2007 column (www.cpatechadvisor.com/go/1577). If you make the use of a tool part of your corporate culture, you will get the full benefit. So Think Alerts.

What the distributor got was a BAM tool for its accounting software, in what is commonly called a Business Alert. In essence, it was a logic statement that said, “If any orders are entered where the margin on the item sold was less than their threshold, immediately send an e-mail notice to the sales manager showing the Sales rep, the customer, invoice number, date, the item price and actual cost.” The sales manager turned this information into a teaching tool for the sales team, and, in the end, margins went back up and profits followed.

Small Contractor Case Study

Consider the case of the small contractor who uses QuickBooks Job Cost and sometimes under bills his customers. Usually, the reason is because job expenses were not getting billed. The contractor needs another tool in his belt: Alerts. One of the features of QuickBooks is Alert functionality to send a notice when there is any unbilled time or expenses tied to a customer. That’s a smart way to help ensure you get paid for all your work and expenses.

Think Alerts, and you can begin to imagine other ways they can help

How much time could a business save if the accounting system could monitor inventory levels for top selling items and automatically send a reorder request to the vendor when quantities fall below a specified level? You can quickly lose customers when a product is out of stock, but you never lose the opportunity to sell if your systems are smart enough to keep popular items in stock.

How could an Alert help a restaurant supplier reduce its spoilage costs for food? In most cases, the meats and almost all the dry products sold have expiration dates. If they were set up with lots, which is common in an integrated accounting system like Microsoft Dynamics GP, then the expiration date for all items is stored when the information is entered or imported. Lots are very effective in reducing spoilage since they can sort by date. Add in the BAM tool, in this case, known as Business Alerts, to shoot off an e-mail to the inventory control manager when the date on a lot is within 30 days of expiration. No pun intended, but watch how that beefs up the bottom line.