4 Steps to Smarter Technology Planning for Consumer Goods Businesses
Within a single consumer goods company, technology maturity, adoption, and modernization can vary widely across the organization. While it’s not required for an organization to have the latest released software features, the key to useful technology is to have enterprise resource planning (ERP) systems in place that support the goals of each department, as well as the broader business.
Over the last two years, many consumer goods companies reacted quickly to provide new offerings, which required new processes and adaptable systems. Moving forward, companies should continue to have a clear understanding of how newer features of their ERP systems and other technology solutions are supporting goals, or in some cases, distracting from goals. Thorough assessment is necessary to uncover what’s working and what needs improvement.
From apparel to home furnishings businesses, consumer goods organizations should reevaluate their systems periodically to ensure strategies and technology are aligned with current and future objectives and also meet return on investment (ROI) objectives. Below are four key steps for better planning and optimal evaluation of an organization’s technology efforts.
Clearly State the Business Goal and Strategy You Want to Achieve
When evaluating efficiency and effectiveness of systems and processes, leaders should work to clearly state the goal and the strategy they look to achieve, regardless of systems and features.
For example, if the business goal is to “improve customer retention,” the pain point for this goal may appear in multiple places across the organization, including increasing customer support calls and returns, declining sales from existing customers, or receiving dissatisfied reviews. Individually, each of these pain points could trigger an evaluation of a specific system or process.
It’s important to remember that the overarching goal to “improve customer retention” is the objective and the basis for tracking key performance indicators (KPIs). Tracking sales numbers or returns, while important, may sidetrack and dilute the original intention of improving customer retention. Businesses must look beyond the singular pain points and solve for the larger strategy. Clearly stating the goal helps maintain focus on achievable outcomes.
Determine the Observable Actions Needed to Achieve the Goal
After a clear business goal has been established, the organization will need to determine what observable actions are needed to achieve the goal.
To continue with the example of “improve customer retention,” one observable action could be “improve customer experience by reducing hold times.” While it may be tempting to also establish KPIs at this point, it’s best to wait and just focus on observable actions that can be taken to support the goal. It’s also important to holistically evaluate actions across multiple departments and systems.
Establish Quantifiable Measurement to Determine Success
After building a holistic list of observable actions, the company should evaluate KPIs that will assist in determining the ROI of systems and processes that support the observable actions and deliver value to the organization.
Continuing with the example of "improve customer retention,” and adding “month over month,” a relevant KPI could state: “improving customer retention by 1% will provide $XXM in customer lifetime value.”
Taking this approach ties the KPI more deeply with the “why” and now gives the business a value to judge against costs to deliver.
Determine Solutions to Measure and Support Tactics
The final stage involves identifying system features and requirements which will align to the observable actions and measures.
To complete the example, one feature could be to have a solution that “routes calls to teams based on customer purchase history.”
By taking this approach, the business has a clear view from the system features to the business goal and the anticipated value to the organization.
Keep in mind, when dealing with technology, it is easy to be distracted by new features and solutions. This is especially true with more software platforms marketing their artificial intelligence and machine learning-empowered offerings. Leaders should focus on how these features can truly enable staff and customers to meet organizational goals.
Technologically mature organizations optimally use their technology when smart strategies tied to the overall business are in place, supported by key actions and clear measurement. When all of these factors are in place, technology can truly deliver a competitive advantage to growing consumer goods businesses.
—Seth Bacon, Consumer Products Senior Analyst, RSM US LLP
