Clevity Blog - How To Quit Non-Value Added Reports

How To Quit Non-Value Added Reports

How To Quit Non-Value Added Reports

As we mentioned previously, data is being collected at a record and ever increasing pace.  While the mounds of data continue to grow, businesses continue to invest in IT infrastructure, data warehouses, and software solutions.  They also spent a lot of time cleansing, manipulating, and scrubbing data to get to the information that they need.

A LOT OF TIME.

So much time, that it is easy to get stuck in the rut of going through the motions of creating a report instead of focusing on what is important: the end result.

When it comes to recurring reports in particular, the process of prepping data and creating the report can often become so time consuming that the process eventually becomes the goal in and of itself.  The reason the report was created in the first place is forgotten and the analyst (or whoever is creating the report) views the report creation process as the most important part of her job.

 

Here are four ways to focus on the end result of your data — valuable and actionable information — rather than the report creation process itself:

 

Start with the desired outcome and work backwards.

This should go without saying, but if a report does not add value, then it shouldn’t be created in the first place.  There are much better places to spend your time and labor than on reports and processes that mean absolutely nothing.  To ensure that you are only reporting on information that adds value, start with the desired outcome and work backwards.

If the goal is to decrease shipping costs, then the desired outcome may be, “We need to size up the amount we would save by bringing all carriers up to a weighted average.”  You can then work backwards to determine what shipment data and other data you need to reach that outcome.

Likewise, if you need to increase material margin by 5%, then you can set your goal and think about what information may get you there.  In this case, Pareto may be your friend, and you may also gather other metrics that will help you determine whether price increases are warranted or if you can obtain discounts with your suppliers.

Whether the goal is monetary or measured in some other way, every report should have a specific ROI measure in mind or it should not be created at all.

 

Never manually create a report more than once.

Every executive has experienced that monumental hunch that warrants pumping the brakes on everything else and requesting supporting information immediately.  Sometimes that hunch leads to real results and the assumption is that it will continue to lead to the same results month after month.

However, report creation is subject to the same laws of diminishing returns as everything else.  What took five hours to create and saved the company $1 million a year ago may continue to take five hours to create with a much lower rate of return.

Assuming the report is still relevant in the first place, there is no reason to be investing the same amount of time month after month.  If you are going to create a report more than once, every step of the process should be automated and (easier said than done) documented.

Automate early, automate often.

 

Continually review reports and cut out the ones that add the least value.

Perhaps the single more worthwhile exercise than automating your data cleansing and reporting processes is eliminating the reports that do not add value in the first place.  When the ROI on a report is non-existent, then you need to free up time and resources for processes that add value.

100% improvement on zero is still zero.

 

Hire a second set of eyes.

Sometimes it is too difficult to buck the trend of reporting for the sake of reporting.  When things become stagnant, it can often be helpful to bring in a second set of eyes to re-energize the business and provide insights that would not otherwise be obvious.  This is particularly a win-win when it frees up your resources to do other things, like completing operational tasks or tackling other issues.

Rather than viewing help as a cost, see it as an investment in greater returns.

 

If there is one major takeaway from this article, it is this:  Analytics should not be viewed as a cost and a necessary evil.  Rather, analytics is an investment that, when applied correctly, can yield significant ROI.

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