- You have 1000 customers. But ten provide all the profit.
- You have 15000 products in 20 categories. But only three or four really drive your business. And those change every year.
- There are 50 states, but Ohio gets all the attention because it’s a swing state.
Some numbers are clearly more important than others.
As a small business person, I try to not become overly reliant on just a few clients. Our client portfolio is more diversified now, but in past years I’ve had to count on a few key clients coming through. I see this problem of over-concentration in other areas too. When I work with clients on budgets, I often see generic forecasts that cover wide swings based on a few critical issues. And I read 10-Ks for huge public companies that say that we’re doing great, but they depend on Walmart for 10% of their sales.
Too often, our reporting and use of numbers don’t reflect the importance of these few key factors. We give people lists and lists of numbers that don’t distinguish between run of the mill and key issues. This is a problem of practice, not technology. Most basic report tools allow you to show only the top five or ten percent of your performers. When I reviewed how this works in Crystal during a recent presentation, I saw a lot of nodding heads in the audience. The consensus was that this was cool, but no one was using it. Why?
Part of the problem is habit. Most people use Crystal to replace traditional reports built by developers in COBOL or RPG or to create pretty invoices and other documents. So they’re used to providing lists and lists of stuff. And they haven’t done top five analysis before, because in traditional development it was a very time consuming thing to do. In addition, the average person receiving the reports – a manager, supervisor or clerk – is used to receiving all the detail and expects to keep receiving it.
Part of it comes down to whether the company is using reports as a way to control operations or as a way to drive the business. If you’re going to use them to drive business, executives need to know what to focus on. And therefore the outliers, the big drivers, are key.
Crystal isn’t the best tool for this kind of analysis. But some options are there and should be used. It becomes a question of changing the perspective of report developers and making sure management knows what they can get.