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Advancing excellence within the Oracle community
Advancing excellence within the Oracle community
CAOSYS It's Just Simple Maths


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​It’s Just Simple Mathematics​
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When running a big company quite often the simple sum of 2 + 2 = 4 doesn’t always add up. And most of the time, its simply because not everyone understands how important their contribution is to the overall ’big picture’.


What do I mean by that. Think of a large cruise ship, those people cleaning the deck don’t really see how they impact where the ship is going. If they realised that keeping the deck clean gives the cruise line a good reputation which means more customers take a cruise, more customers mean greater revenues, more revenues then open up opportunities to go to different places! So, if they understood the big picture, cleaning decks can steer a ship! That said, it is often the case that the big picture is hard to see when you are just cleaning the decks.

And for a cruise line, sometimes it is hard to invest valuable dollars in more deck cleaners when margins are tight. But sometimes, looking at things from a different angle can really help. Instead of more deck cleaners, investing in robotic cleaners (like the ones I recently saw at Charing Cross in London and Heathrow Airport) means deck cleaners can move to become customer experience personnel, thereby achieving greater customer satisfaction, which means even more customers and so on.

Let’s circle round to why this sort of scenario applies in a large company running Oracle E-Business Suite. From my own personal experience at both ends of the spectrum, the IT teams and other certain parts of a business can be far enough away from the sales teams, and their ever-present pressure to hit their sales figures, as to not really understand that everything they do ultimately determines whether those sales targets are hit or missed. Therefore, deep inside a company, sometimes decisions are made that aren’t based on how company revenue can be generated, rather on how much can be saved or how spend can be avoided. Sadly, to quote the Roman playwright Titus Maccius Plautus “you have to spend money to make money”. The only subtext to that is that, if you spend money, you need to make sure it is spent well.

So, where does mathematics play a part?

Let me give you an example, a  company is starting to struggle or wants to grow in its chosen marketplace, and it needs to up its game to get revenues either back on track or on an upward trajectory. The business has identified that replacing the manual processing of sales orders in the field by giving the salesforce mobile technology would increase order throughput, allowing salespeople to see more clients and, as a result, increase customer satisfaction which ultimately would increase revenue potential. As such, the business agrees a project with IT to deliver the new technology.

However, the IT department is struggling with a lack of resource to deliver such projects in the short to medium term. They could buy in consultants but just don’t have the budget for that when they have inhouse skills. It’s just those skills are currently carrying out manual processes that should have been automated a long time ago. Amongst many I could list, one of the manual processes in question is usually the maintenance of risk and compliance controls and then the lengthy internal and external audits that come round all too quickly every year.

However, the IT department is struggling with a lack of resource to deliver such projects in the short to medium term. They could buy in consultants but just don’t have the budget for that when they have inhouse skills. It’s just those skills are currently carrying out manual processes that should have been automated a long time ago. Amongst many I could list, one of the manual processes in question is usually the maintenance of risk and compliance controls and then the lengthy internal and external audits that come round all too quickly every year.

But with some companies, investment in automating this area is seen as a waste of money as it’s hard to draw a direct link to increased sales or even a compelling return on investment (ROI). They simply use the resource they have and, although it always takes ages, they always muddle through. Why spend money when I have people! But this is simply because they don’t see the bigger picture.

 

If they did understand the bigger picture, then they would quickly realise that, and here’s the mathematics, by automating some of the manual processes connected with risk and compliance controls along with the time spent on audits, you can release ‘people’ to work on something else. That resource can then deliver important revenue generating projects quicker which then has a direct effect on making the company money ahead of schedule! And that can make a notable impact.

 

For example, if you have 2 people (12-man months x 2 = 24-man months) looking after risk/compliance and you automate internal controls and user access reviews (UAR’s), you might only need 1 person (12-man months). If it normally takes 3 people 2 months to prepare for audits (2-man months x 3 = 6-man months), if you automate them, then it might only take 1 person, 1 month (1-man month) with the auditors only in for 2 rather than 4 weeks.

 

The mathematics: 24 - 12 = 12 and 6 – 5 = 1 then 30 – 17 = 13.

 

And that is 13 months of man time that has become available through automation, not mentioning that the cost of the auditors has halved in the process. The result is that the IT team can redeploy its skilled resource onto business projects earlier, which in turn increases sales revenues at the sharp end quicker and might even give the company a greater competitive edge. Something shareholders love to see, and be under no illusion, every business is run on the basis it needs to deliver value to its owners/shareholders.

 

But all of this only really works if those people in the engine room have the vision to see the bigger picture and to realise that introducing efficiency and agility into the lower echelons of the business helps towards achieving the higher end objectives.

 

Some out there will say “our company is too complex to take this approach” or “it’s not that simple for us”, but in reality, it isn’t complex or complicated if you just take a step back, take a deep breath and look again at the opportunity in front of you.

 

Using a little foresight to make a relative investment in the area of compliance and audit automation, can make a significant contribution to generating revenue. And it really does all come down to simple mathematics.

 

About the Author

Stephen Davis is Business Development Director at CAOSYS Limited. For the past 20+ years, CAOSYS has been a market leader in developing governance, risk, compliance and reporting solutions for Oracle EBS and Cloud ERP. The company strives to ensure that users of EBS always have the right answer to the ever-evolving compliance landscape.