Thursday, August 5, 2010

Prioritizing Business Areas for Study

The building of the overall information architecture can take years and you should get started as soon as possible. Obviously, you can't do everything at once. The first step is to prioritize business areas and work on them one at a time. The decision on where to start should be obvious. It is the department that will benefit the most.

In the convenience store business I would chose the management of in-store inventory first, because it has the greatest potential for realizing immediate profits. I have often said that the proper management of retail inventories will double the profits in every store within the first ninety days. This may be hard for many of you to swallow because you don't have the tools and experiences in seeing the results first-hand. Also, few convenience store operations have a department for the management of inside inventory, having left most of those decisions up to your suppliers. But regardless of how you feel about my opinion or the opinions of top management, you will need to make this decision before you choose an area to start.

Nevertheless, the first area to work on should be the one that has the greatest potential to increase profits. For years most operators have spent too much time on efforts to reduce cost, but it's been my experience that reducing costs has been literally beaten to death. Once you have identified some top-ranking choices, choose the one that has the shortest completion time. The reason for this is simple — it gives the team a quick success. It will give them confidence and enthusiasm as they begin to tackle the more difficult ones, and it will help them answer the question: How long will it take?

You should begin to see results immediately without waiting for the first study to be completed. In the absence of more professional tools such as decision support software and executive information systems, spreadsheets can be designed to assist in the analysis process.

Certain systems might need to be implemented immediately. There is always a tradeoff between the implementation of a temporary change versus long-range completion of a new business structure and this should be taken into consideration before making permanent changes. There is however no reason why separate teams cannot be working on different projects simultaneously. This of course will depend on your resources.

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