Take
a moment to think about this question - the following
things probably spring to mind when we talk about
‘being in business” or “doing
business’;
Customers
The
reason the business exists and survives
Employees
The workers and
managers that bring the business to life
Products
The goods or
services that are the output of the business
Suppliers
The source of
goods, services or materials your business
requires
Offices
The ‘bricks
and mortar’ of a business
Logos
The corporate
identity at the office entrance, on the brochure
or web site
Web Sites
The presence
of the business on the Internet
The
main concept that drives a business and brings all
the above into focus is Added Value.
A
business must add value by creating new ideas
and combining them with resources in some way
and sell the results on to a customer, making
a profit in the process. In order to implement
the ideas it buys and consumes resources. A business
is therefore a ‘Buy/Add Value/Sell’
system. Much like a vehicle such as a car, plane
or ship, it is a system that delivers a ‘payload’
over time - products and services to its customers.
How is Added Value
measured?
Obviously the
ultimate measure is money, whether through profit,
revenue or stock market capitalised value. As we
probably all know too well, governments usually
have their own way of measuring Added Value –
Value Added Tax (VAT). VAT flows back to the Treasury
as a percentage of the input and output values for
each business. This is the ‘supply chain’,
which ultimately ends with the individual purchaser
or consumer.
However, in order
to achieve these vital numbers other internal departmental
targets must be set, achieved and measured - such
as;
Sales targets
via revenue, units shipped, new accounts
Cost targets
defined and measured by the management budgeting
process
Customer Satisfaction
via retention, loyalty surveys and other
contact statistics
Employee Satisfaction
employee retention and turnover rates are
the ultimate measure
Supplier Satisfaction
via surveys, pricing and incentives offered
to your business
An important benefit of well-implemented
B2B systems is a significant improvement in the
quality, timeliness and availability of added value
measurements of your customer and supplier transactions.
