Growing businesses need accessible and accurate business information, along with more robust business processes. But for companies in the fashion and lifestyle industry, this improved visibility and control is as difficult to achieve as it is essential.
Business growth can be hard to manage. As companies increase in size, it becomes more and more difficult for owners and senior executives to gain an up-to-date and accurate overview of business operations.
Stock, that was perhaps previously just stored in the basement, is now spread across multiple different warehouses. Suppliers, who were initially small in number, now include several overseas manufacturers and distributors. Sales figures that used to be displayed in one simple spreadsheet are now split across multiple departmental systems. As a result, reports can take days to compile, and by the time they are ready, the statistics are already out-of-date.
It’s a common problem. Yet real-time visibility of key performance indicators is vital for strong and effective business management.
Business growth exposes other weaknesses too. While small companies can get away with minimal formal processes and systems, medium-sized companies cannot.
As a business grows, it needs to establish common processes and systems that can enhance efficiency and aid integration. These processes and systems give companies greater control over how people work and can lead to improvements in data quality and performance. They protect companies from losing valuable company ‘know-how’ when individuals leave and make it easier to induct new employees when the business expands.
Improved visibility and control is important for companies in the fashion and lifestyle industry, but can often be hard to achieve. This is because these companies typically experience:
Frequent change
Change is an inevitable feature almost every season. Business leaders need to be able to make fast decisions, in response to emerging new business opportunities – and they cannot do this unless they have a firm grip on current operations.
Rapid growth
A company with an innovative style or fresh market strategy can experience tremendous growth within a period of just a few years and not have the time to put proper processes and systems in place. Suddenly, these companies find that the adhoc processes and reports used to build the business are not robust or mature enough to support the new larger organisation.
The right balance
Systems, processes and reports are necessary for visibility and control – but not if they restrict the very creativity that makes a business a success.
So how can fashion and lifestyle companies improve their visibility and control?
- With more reports?
- With more processes?
- With more systems?
Yes – but take care. Reports, processes and systems are important, yet they can damage company, as much as empower it. Used inappropriately, they can reduce efficiency, impede business flexibility and discourage creativity. And for companies in the fashion and lifestyle industry, these qualities are vital.
More than anything, visibility and control is about getting the balance right.
Companies need to know exactly what is going on in their businesses, but don’t want to burden staff with the need to create and maintain a myriad of complex reports. Regrettably, for some companies, the implementation of new systems and reports has led to increased administration and a downturn in employee productivity.
Similarly, some companies have made the mistake of implementing business processes that restrict flexibility. Businesses need to have processes to guide the way that people work, but cannot afford to stifle entrepreneurial ideas and creativity. Rather, they need to encourage and support the savvy buyers and creative designers who can spot upcoming trends, quickly and produce the innovative new lines that will drive up revenues and margins. In this industry, individual flair is important.
While growing businesses need to achieve improved visibility and control, they need to do so with care.
In reality, there are many different ways to achieve visibility and control, but not all of them will be right for the fashion and lifestyle industry. That’s why companies in this industry need to ask two key questions:
1. How can we improve our visibility of business operations while maintaining efficiency?
2. How can we implement more processes and systems to guide employees, without restricting creativity?
1. Visibility with efficiency
The first, and perhaps most essential, step towards improving visibility is to ensure that all employees, across all departments, not only share data, but use the same data. This eliminates duplications and reduces data discrepancies to significantly improve the overall quality of corporate information. At the same time, it reduces the administrative burden of maintaining and updating multiple data sets, and improves efficiency company-wide.
If company data is integrated in this way, it becomes much easier for companies to generate up-to-date and accurate reports. Less time is wasted creating adhoc reports that pull together information from multiple departments, as all of the information is readily accessible in one place for all to see.
It is important for organisations to realise that reporting requirements will change. Companies should therefore implement systems that provide the flexibility to adapt reporting formats and create new reports almost instantly. They will also require the ability to produce ‘what-if’ scenario reports that enable senior managers to test out and analyse new strategies quickly and easily before implementing them.
Fashion and lifestyle companies typically base their forward planning on a wide range of assumptions for costs, lead times and demand. During the life of a product, lots of changes can occur, such as an increase in material costs or a fall in demand, and these changes will impact predicted margins. Keeping track of these changes in spreadsheets is a complex and time-consuming manual task.
Some enterprise solutions offer features to automatically account for these frequent changes. By including progressive margin accounting features, for example, they allow companies to constantly refine their margin figures, as and when business changes occur with minimal manual intervention.
Similarly, some enterprise solutions allow fashion and lifestyle companies to delay ledger entries. This enables finance managers to manage stock through the supply chain more intelligently and only fix entries in the ledgers as necessary. Features like this give fashion and lifestyle companies full visibility into their business operations, while at the same time allowing them to maintain (or even improve) efficiency in their business.
2. Control without restriction
Improved control is largely achieved by the implementation of standard systems and business processes that guide employees to work in ways that can be monitored and assessed. This common framework improves the way in which departments interoperate and can be the source of significant efficiency gains and cost savings.
However, companies must ensure that the processes and systems implemented can be easily adapted, as business needs change. Equally, they must be flexible to allow employees to perhaps shortcut a process or create an ad-hoc report in response to an emerging new opportunity.
Spreadsheets are a good example. Many medium-sized companies still use spreadsheets to monitor business activities and produce reports. Yet formulas can be easily overwritten and numbers changed, which makes them prone to manual errors. In addition, different versions of spreadsheets can exist on different desktops. The result is weakened business control.
In contrast, the business systems offered by enterprise software providers have defined fields that will not allow users to accidentally change formulas or manually overwrite automatic calculations. These systems are centrally stored, so that there is only ever one version, which is always up-to-date.
To achieve effective business control, this kind of centralised system is clearly ideal. However, there will be times when a simple spreadsheet will be required as a quick and easy tool to assess a new opportunity or trial a new approach. Therefore companies in the fashion and lifestyle industry should adopt an approach that encourages standardisation where possible, but allows deviation where necessary.
Prologic Approach
Prologic knows what a difference effective visibility and control can make. The implementation of new centralised information systems and integrated business processes has helped many of our customers to leap ahead of their competitors and achieve significant increases in profitability.
Gain visibility and control:
- Remember that your need for improved visibility and control will increase as your business grows.
- Focus on getting the balance right: systems and processes that are too demanding or rigid will stifle creativity and lead to inefficiency.
- Select an enterprise solution designed specifically for your industry – so that flexibility comes as standard.
- Draw on the experience of other companies operating in the fashion and lifestyle industry in designing new business process.
- Be pragmatic: implement new integrated systems and business processes gradually and constantly assess their impact.
But we also know how important it is for fashion and lifestyle companies to avoid systems and processes that are over rigid. With over 20 years’ experience of working exclusively in this industry, we are adept at helping companies to achieve precisely the right balance.
Our solutions are designed to meet the specific needs of apparel, footwear and other lifestyle and fashion businesses, and have in-built flexibility. Companies have the freedom to change processes and reports with ease and can take advantage of a range of flexible accounting and financial planning features.
Prologic’s business analysts offer customers regular independent assessments of their business operations and can help them to design processes that will improve internal efficiency and productivity, while still allowing individuals to use their own initiative.
We can help companies to set up key performance indicators that will be effective in an environment of frequent change and offer advice about which reports to produce. Similarly, our analysts conduct workflow reviews and deliver training to help ensure that processes are as streamlined and effective as possible.
Each company is different, but with our experience, we can ensure that our customers benefit from precisely the right level of control and visibility for their businesses.