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Weekly billing format for Product Management

good morning thank you for joining armanino today for our webinar manufacturing Excellence through bookings Billings and backlog analysis my name is Mary Trestle and I'm going to get us started so first of all I want to give you some instructions for using your webinar pain you'll see the webinar pain in front of you please note that the orange arrow will allow you to minimize or maximize the pain if it is minimized simply click on the orange arrow to bring it back feel free to submit any questions that you have for our presenters during throughout the duration of the webinar our presenters will handle those questions at the end of the webinar as time permits and all participants will receive a link to the recorded webinar and slides within 48 Hours next you'll see um if you are using your telephone to listen in on the webinar we'd like you to make sure you modify your audio settings and select used telephone if you are listening through your computer speakers please select to use mic and speakers if you have the incorrect setting selected it will produce an echo sound with that I'd like to introduce our presenters today the first is Jeff Russell he's a director in our Consulting practice and he's implemented Microsoft Dynamics AX and CRM in more than 20 engagements in a multiple U list of Industries including semiconductor electronic device medical device pharmaceutical and outsourced technology manufacturing environments he brings a great a range of professional experience from manufacturing Engineering Supply Chain management intellectual property contracts law and negotiation our second presenter is Jeffrey weong who is also director in our Consulting practice he has broad experience in all aspects of Enterprise application development system Integrations and business intelligence within Erp and CRM systems Jeffrey began armanino High performing business intelligence practice here and leads a strong team of implementation and uh customization um professionals so with that I want to let you know today we are covering some main topics here what is bookings Billings and backlog the value of this and common kpis around booking spillings backlog we'll also talk about how to implement this type of analysis and show you a live demo of booking spilling in backlog analysis and with that I'm going to turn it over to Jeff Russell thanks Mary so Mary stole my thunder a little bit there but this the first question is what is BBB so BBB is an acronym for bookings buildings and backlog and BBB is information that's really fundamental for any organization that manufactures and ships products but it's also applicable to service Industries and service organizations where time and services are the source of income BBB really reflects the pulse of the business and enables the business to plan and react to current market events it's a representation of overall firm performance across Marketing sales supply chain manufacturing and distribution and delivery so wanted to start off with a couple definitions so bookings bookings are really field sales that must be planned for and also provides management with anticipated demand bookings information enables you to count new orders in the current period identify which products are performing the best and poorest and monitor Trends it's really the the influx of new business Billings represents actual sales that have been made and have been invoiced to customers so Billings usually translate to directly into a revenue backlog represents products sold to customers that will either be delivered from inventory or through corresponding procurement and production to support the demand it's essentially all the outstanding demand backlog represents customer orders which have not been shipped or invoiced and it's usually analyzed by committed delivery date BBB also includes two additional components in most cases cancellations and returns cancellations represents the cancellation of an order after it's been booked visibility into this type of activi is critical not only because it adversely impacts overall BBB performance but the loss Revenue associated with a cancellation can businesses even more so given that all the sales work had been done to close the business returns pretty self-explanatory they represent the return of a product by a customer after it's been built and delivered in many cases return reasons are also tracked um and incorporated into data and Analysis around BBB reporting so in this track on this on this slide excuse me we have a a process flow here to kind of drive home the concept of the buildings booking backlog um life cycle of a sales order so essentially what you see in the The Orange Box up to the top left is a new customer order arrives and that's effectively a new booking at some point the supply chain team will make an assessment about whether the order is going be fulfilled through inventory or procurement and production and It ultimately will be given commit dates and the sales order is confirmed at that point it's it's really what we think of traditionally as backlog after the ppack ship process is completed the invoice is generated you're seeing billing so that kind of gives you a visual representation of the process so I want to talk a little bit about the value of BBB analysis BBB data is is used to to form an accurate picture of the direction in which the business is heading and it's really it's as I said before it's related to every core part of the business so sales marketing inventory financial reporting and profitability abroad BBB can answer critical questions like is backlog sufficient to meet sales and revenue goals which products Drive the most Revenue how does current period BBB compare against past periods how does the business performing how is the business performing against committed delivery dates so with that in mind that's the value of BBB but let's let's spend the next few minutes talking about some actual examples so there's a few different perspectives that businesses can use to interpret BBB information and and really kind of which booking backing or billing Direction they're going to use as kind of the impetus for their analysis so in this first example this is a representation of kind of the the focus of starting from a backlog perspective and analyzing the trends so if you'll follow along you'll notice that if if backlog is trending up it the business may want to look to the the billing side of the equation and see you know are we are we getting increased increased bookings um that could correspond to the the increase in backlog or is there an issue with insufficient inventory or delayed Productions something in the supply chain that's causing delays it's causing uh your backlog to go up so there's some business implications to to any of this analysis right you know do we need to hire more operation staff if bookings are going up or should we be working with different suppliers we're having supply chain issues so that's an example from the the backlog perspective looking at it from the lenss of coming in on the billing on the booking side excuse me a business may want to may be seeing hey you know bookings are are higher than normal they're trending higher and and within the bookings framework they they want to know what's the cause of that do we have a reduction in cancellations because if that's the case I can see the trend going upward do we actually have increased sales or our margins is going up but from there the business may want to look at backlog and say you know is it possible that this increase in business is improve is attributed to improve performance on the Fulfillment side basically meeting customer request dates um on time delivery things of that nature so the business implication side of that is you know maybe it's time to revise forecast or budgets if we're you know is the grow sustainable or we moving ahead of ahead of plan so this last slide is kind of a comprehensive view looking at kind of all three playing together and how they they might interrelate in a given analysis so in this case you see a chart here showing Billings trending upward so Billings trending upward could be attributed to a couple different things it could be that bookings have actually increased or it could be that backlog has decreased as you're basically filling and basically closing on the business that you've had in your backlog over a period of time so you might ask yourself questions like should remaining backlog be adjusted to ship differently depending on how you're trying to hit your quarterly or monthly targets and then conversely if if Billings are trending down you might ask questions like are there geographical trends that are causing downward sales or can we negotiate for expedited um delivery in our supply chain okay and with that we're going to launch a polling question for our audience so in a moment you're going to see a quick poll on your screen please select one of the answers and the question is how are you analyzing BBB in your organization today a are using manual spreadsheet reporting B you have a fully automated dashboard C I don't have a way to analyze BBB and D I don't know so we're going to give the audience just a moment to to fill out um their responses here we' got about 75% of you who have registered your votes all right and with that we're going to go ahead and close that poll and share with you the responses great so thank you Mary and I think it's um it's pretty interesting because I think that's that's very similar to what we come across in our business it seems like 57% of you um are doing BBB analysis but within uh the use of manual spreadsheet recording and only 21% are actually having a fully automated dashboard so before I start with uh a demonstration of what a BBB analysis that we have here as an example I would like to cover some of the items to consider when you're implementing a a BBB analysis within your organization the first one is uh actually the first two is probably the ratios here book to Bill and backlog to book essentially this is creating a correlation between your bookings building backlog to what what Jeff was saying earlier be able to track it and monitor it in a in a simpler manner so that's just one number that that you're tracking in terms of correlation and this is also helpful uh for an organization to to understand um whether that number is good or bad it's going to be dependent on every single organization and their growth stage as well within the organization the next one that's very common as well is trending the trending that I mean here is not just trending your booking backlog or billing separately but it's also trending them in a combined basis how are your businesses growing how is your businesses trending from those three different perspective and not only being able to Trend it as an aggregate but you should also be considering how to Trend it by customers by different channels as well as your product hierarchies the next one is uh average selling price this is also very common in some organization but not so common in some organization partly is because of the way they're doing their business when they're having um different contracts and Performing different discount mechanism pricing mechanism ASP is becoming very very important and crucial in their analysis but some other organizations where they work mostly with distributor um without necessarily a different contract for every single one of them this is probably less compelling for them to analyze the next one is backlog aging this is just a view for organization to be able to know how am I um looking from the uh the backlog perspective is this is this going to be growing is it going to be it's going to ramping down a little bit and this could typically be analyzed within uh two different parameters which is by the requested date or the scheduled date um that that that you have within your organization and the last but not least it's a top X of anything um it's just a quick view and summary of your health of the business looking at who is your top customers who is your top products where is your top channel or market for example so the next slide here is um a little bit again items to uh consider or things to consider when you're implementing a BBB analysis um the first one is having a correct understanding of the BBB analysis itself understanding what BBB means and understand how it can impact your organizations and make those insight become an actionable decision-making process the next one is having an integrated BBB system um what we come across a lot of times organization doesn't have all the backlog billing and booking all residing in one systems they have multiple systems if you're like everybody else um there are definitely a lot of different ways to mitigate those you know from one extreme is reimplementing a new system where everything is in one um single place or it could be um building a data warehouse or implementing some kind of an integration or business intelligence tool that can tie all those information together following and D tailing from that perspective is also the availability of accurate data a lot of organization kind of struggle when they have multiple systems and relying data from both systems because a lot of time it requires them to Double Entry information from one system into the other so this is not only time consuming but it's also error prone last but not least is leveraging the right tool what we come across a lot of organization have good data have integrated system that they can produce the booking billing and backlog information but unfortunately a lot of the times they're using the wrong data and sometimes they they use data that's that's good but not the right tool so what I meant by that is looking at it from the perspective whether you should be creating a report as opposed to a visualizations that that could help the human to analyze that better or in different perspective is looking at it also not only from two-dimensional so I want to see the top X of something but I want to be able to see the top product by a market segment on a specific area so looking at the information and insights from multiple different dimensions and last but not least is the fact that leveraging the right tool should also allows you to quick compare and analyze and drill down data and drill across into the data very quickly so without that without further Ado I'm just going to go ahead and jump to the demo and a demonstration here is a demonstrations of um an example of the BB analysis I think I just want to like to remind everybody even though the premise of our B BBB analysis example here is is based on items but I think BBB analysis is also very compelling for a lot of organization not just widget based company um it also can be a very applicable to a lot of Professional Service organization so I'm just going to quickly jump into the dashboard screen the dashboard screens typically allows users to be able to at the very high level knowing what's going on in their organizations in this case we're showing the amount of bookings and the quantity and the middle we're showing the billing amount and quantity as well as the backlog and you also notice there's a book to Bild ratios and a backlog to book ratios this again helps the organization to Highlights if there are any issues um based on the treshold they have set up but I'm just going to quickly select 2014 just to kind of limit the information that we're seeing and I can see also on the bottom here the book to Bill ratio in the middle chart I'd be able to see the correlation between the book booking the billing and the bookto bill ratio so that way I can tell right away on week five 2014 week8 and as well as week 10 they have a bit higher bookto Bill ratio than everybody else on the different weeks so again it's very quickly visually appealing so that way you You' be able to see what's going on and in the bottom portion here in the bottom chart there's also the booking billing and backlog um chart combined so that way you can kind of see where your business trending and is made up so you can see quickly that there are portion of it is actually been built there are some of them that still in Booking stage but some of them already start becoming a backlog and this is represented in the weekly basis but with any good um buiness analysis um you should be able to turn it really quickly to for example in terms in terms of month in instead of weeks so I can turn that around I can quickly see that has been trending for the past first three months of a year think are going well and on the left hand site really quickly I just want to point out um it's also important probably to analyze your backlog from multiple different perspective what we have done here is it's one of them is based on the customer requested date the other one is based on what we have we have scheduled or what we have promised and the last but not least is the what we have scheduled what we have promised without customer requesting a date so based on this information you can kind of spread your backlog around based on on those three information so if I toggle even back and forth on any one of this the backlog portion should change ingly based on the time period that that it's been set and very quickly I can also see I I can drill down to a particular Market segment for example a particular channel so that way You' be able to see information pertinent to just that Channel or I can even go down to the for example product Family Clothing down on the left hand side so again it's very quickly you should be able to analyze your business from different perspective not only from the market segment Channel perspective but also customer and product hierarchies I'm going to go ahead and uh clear my selection and just go over the overview page really quickly we mentioned earlier there is a a top x that you should be um used to be seeing um if I focus again in 2014 I can see right now this are the top 10 Market segment that we have broken up by the the booking billing and the backlog that we have but I should be able to also quickly change this to the product family for example then I can see right away a component is a lot higher than a bikes at this point and again I can toggle this to different customer group or even to the different product group and on the bottom here is similar representation that we saw earlier on the dashboard page one of the biggest difference is this is not in a combined basis so the purpose of this is to actually identify better trending and a correlation between the three different components of the booking billing and backlog so that way you know how things are trending up and and is it um a correlation um between one and another going to the booking tab here you're going to see similar information but it's focusing on just the booking perspective you'd be able to see the top 10 from the book dollar perspective you'd be able to see the top 10 book quantity and you can see it also from customers but what I would like to show you is again having the ability to get not just visual because everybody likes visual but at the same time they need the data and down at the bottom we'll be able to see the different data points and in this case we're seeing it by the the weekly periods um and by the market segment going across and I can expand any one of this and seeing it breaken that by the product group but maybe it's too much of a granularity and I would like to bring it up to the product family then I can see the market segment broken up by the different product family so again it's very intuitive and that way um people can analyze it quickly just moving on quickly on the other ones um for example going to the billing it shows similar information but just focusing again just billing perspective I can see the trending over multiple years broken out byed from Market segment so this is again just by looking at this I quickly know that mid of December 20 um Mid of 2013 that's when when we start doing the distribution campaign then we start opening up the different Market segment from the different chain um and a different distribution channels and again down at the bottom as as always you should be able to see information also in a tabula format the backlog is is also slightly different but it's also focusing on just backlog perspective in this case you should be able to see aging from From perspective of Aging I can see right away the different break Breakout by product family and I can flip this maybe by the product group really quickly so I know right away how how every single of the different product groups are made up and if I want to focus for example which one that we have to uh deliver the soonest within the 60 days period I can click on the period there I can tell right away we have to do a lot of chains for the next um 60 days period so again this makes it very easy very quickly that you can mix and match your selections and on the bottom hand uh at the bottom chart here it's just a quick representation on how you can compare the different bookings I mean the different backlogs based on the different dates so if I if I focus on particular weeks then I can see right away the difference between the request date The Promise date and as well what was what was scheduled to promise without being requested so again I can drill down I can focus on this particular period And I can see right away maybe a week 20 for example that we actually the customer requested to be um to have that product but then we scheduled more for that week which is which is which is good that means we're staying ahead of the game okay going over a couple next tab here the next one here is just doing a comparative I think a good BBB analysis should always have a good comparative that you be able to to slice and dice and compare things um together so in this case you can select the metric to compare in this case we've selected amount but you can compare also the ASP and a quantity and on the left hand side here all the different filters drives the orange color visualizations or or cells and the right hand side here will drive the visualizations that screen so I can quickly say on the left hand side let's say if I want to compare Billings for the two periods I can compare Billings and let's pick 2014 on this one I'm going to pick the same thing Billings on the right hand side and I'm going to pick the year 2013 but instead of comparing it like this I want to compare it by the month only so by doing so I can see right away that 2014 for the first three months of the year we're definitely ahead and in our demo data here we're assuming that today is actually um April early April so I can see right away the three months we are staying ahead of the game over last year and we can even drill down further we can say I want to compare how we're doing in bikes for example on our sales in bikes so again we can see that visualization right away not only that we can also see it also from the bottom perspective here we'll be able to compare it by different customers and we can even see it the month-to-month comparison as well so this is not only comparing same information in different periods but it's actually more powerful than that so I can quickly clear the selections and I can say I want to compare Billings but in this case the same period but for different product groups so I can pick billing for 2014 let's say I pick billing for 2014 as well on the rightand side but this time I'm going to compare the performance of my bikes and my clothing and instead of 2014 Maybe want to pick 2013 really quickly so we can see a little bit better trending in a full Year's data so we can see right away there is a correlation between selling bikes and selling clothing on the first four periods of the year but starting from early summer spring late late late spring then the clothing line even though it improves but it doesn't spikes up as much as a bike so again this correlation might be very interesting for your organization and being able to compare things with one another makes it very very easy to to identify any insights the last one here is reports any good BBB analysis should not only give you the information at the summary level but allows you to get the data to the lowest um data points possible so in this case there are some Prine look and feel so you can just click on backlog by item we can see the breakdown backlog by the different items I can click on the backlog by customers I can also look at for example billing by segments these are some of the predefined ones but then if the user would like to to improve on what they see in terms of details we can do that too so we can just click on a product family for example I can click on a product group and I can move the market segment to be the first and I can double click the market segment to sort it out and I might even decide actually I want to see this in a much more granular I want to see by sales transaction ID I want to SE by the item I also want to seat by the date for example so this comes to the point where it becomes a transaction details so again this is just a quick representations of what's possible and what should a BB analysis contain great thank you Jeffrey and so now is your chance to submit uh questions to our presenters we've gotten a couple in through the course of the webinar so with the with that I will ask you the first one um so Jeff Russell I think I'll start with you and this and then Jeffrey you can weigh in but what are some of the biggest challenges of doing this type of analysis some of the biggest challenges with doing this type of analysis I think that kind of highlights some of the the points that that Jeffrey wayang was trying to make um early in his presentation really just ensuring that you have the the right structure in place from a data standpoint and that you understand the systems that you're utilizing to bring together the information um you know we we have tools that can be leveraged as as Jeffrey mentioned um to bring the data together data warehouse capabilities and and bi tools to bring the information together but you know it's the the data out is only going to be as good as the data in so that's usually one of the biggest challenges okay all right um someone wrote in and said if I'm not a manufacturer how will I get value from from bookings buildings and backlog analysis yeah so I think I think a lot of the information that we we saw earlier it's again it's based on widgets but I believe every single organization that we come across so far even though we probably don't call it BBB analysis but they have the same concept we are a professional service organization ourselves and and getting the value of understanding where the bookings coming in that means the engagements that we go through as well as the actual backlog which is the work that we have committed to but we haven't delivered that becomes our backlog and it facts our schedule and at the end you know managing that through the billing also helps understanding is it because we have a lot of work last month that's why we're bailing more or is it because um because we have a lot more orders so we actually much better position um this time around so again I think it's very applicable to a lot of different industry because everybody does to some extent manage their booking billing and backlog great okay we had another question come in and that is is dynamic insights a custombuilt solution okay uh Dynamic insights is is a custombuilt solution um for a number of different Erp systems so we we definitely have that in place and a number of them such as the sap as well as the dyamic ax but it can actually be overlay against any systems that you have in place today all right and how long does it take for a company to implement a dashboard like dyamic insights that's a very good question and it's a very broad question at the same time I I think um the implementation time ranges um between weeks and two months however it's it depends on the maturity of your organization and what you have in place what we typically come across it typically could be done within four to five weeks okay great great well thank you Jeff and Jeffrey we appreciate your time and thank you to our audience for for logging in today again you will receive a link to the recording and the PowerPoint slides Within in the next two days and uh please fill out the survey as you exit our webinar thank you