As a company, is it worth entering “The Good End”? Google answers.

Google launched an analysis of the behavior of brands and consumers for El Buen Fin 2019. In it, the tastes and perceptions of people towards brands, the most consulted niches and the companies that are already a benchmark of the event are presented. Due to the size of the document it is impossible to publish it completely, if you wish to have it we will gladly send it to you via email in the comments below.

In difficult times, ambidextrous companies.

We are about to finish the year 2019 and it would be absurd to deny that it has been extremely complex, from my point of view it has been since the earthquake of September 19, 2017: my numbers were climbing in an extraordinary way but since the earthquake something happened or, rather, everything has passed.

As an example, the Trump-AMLO combination; many at the time predicted it and I myself thought it was extremely unlikely, however that is today one of the most turbulent factors, but those are the facts. But, before that, what can we do in companies? Let ourselves be infected by the virus that “everything is slow”? Wait for things to work out? not invest? It seems to me that our obligation is to evolve in an ambidextrous way, to have the ability to exploit the strengths of our companies while continuing to explore business opportunities that may arise in the future.

Thus, in the month of December, most of the companies that are used to planning their next year will have their strategic planning for 2020 on their desks and with it, the prediction of their financial, commercial, process management, and asset management results. people and information technology, then how to plan an ambidextrous company? In good times who designs the best prediction is marketing, but in times of uncertainty who has in their hands the best prediction is finance and this is where I suggest something different:

Exploitation initiatives

  • Manage your company like a toothpaste with little paste, sounds strange right? I mean making an analogy of when one has a toothpaste with little paste and one is using only what is necessary to manage its content, very different when the paste is complete and generally one uses more than necessary, perhaps even wasting, then, imagine your finances as a toothpaste with little content and order your administration in the following way: from your sales, separate the operating income into another account, then separate your taxes, then separate your suppliers and leave your expenses at the end, strange? ? what it will cause is that you and your team sit down to review all the expenses of the company and question whether they are productive, in the first instance you would tell me that they are, that all the expenses are justified and that it makes no sense to review with a magnifying glass each of its items, however, as I told you, the first operating principle is to improve the execution and continuous improvement of business processes or their current capabilities, then force oneself to work with a paste with little product, that is, optimization of capital of work.
  • In the design of initiatives, try to give priority to those that generate cash flow, perhaps the profitability is affected in some of them, so the best selection is , initiatives that being profitable do not “bleed” your cash flow, be careful but invite your consumers to promotions, discounts, repurchase mechanisms; always looking to generate flow.
  • In difficult times the one who wins is the one who has the product, your inventories will play an extremely important role, your negotiations with suppliers, the management of your 80/20 and the possibility that your consumer always has the product when he arrives at your point of sale. Be careful, if your competitor fails in this matter, it will be a very powerful lever in your sales, so think 80/20 and analyze that the 20% of your products that generate 80% of your income, those religiously have them and the others do not. they will be necessary, don’t worry.
  • Prioritize the short term over the medium term, that is, work with your installed base and your most powerful clients. There is also an imbalance here, there is also an 80/20 relationship with your clients; analyze the 20% of your clients that generate 80% of your income, sit down with them and pamper them: in these times you cannot afford to lose just one of that group, the others are not that they are not important, but they are for the medium term.
  • And finally, as a friend says, “I started making money in my company when I started sharing it with others” and you know, you’re right. You have to share, try to take care of your support network, your suppliers; we all need money to circulate and that is how we ourselves in companies will make the economy move.

Scouting Initiatives

  • The principle of exploration is to seek business through new business models, so go digital! Start working O2O, that is, if you are in the Off Line world, start exploring the On Line world, work on your social networks, review your website, create information blogs, work on digital advertising (much cheaper and more profitable than the traditional one by the way), that is, start to set foot in the digitization of your company.
  • Look for new clients who know your value proposition, look for them on your digital platforms! Review your business processes, start structuring your traditional process in a digital context and map your sales process in a CRM, (by the way there are many, very good and free ones on the net), get the business area out of the chair and go out to improve your conversion rate: new customers with my 80/20 products, safe money!
  • Go to China, it may sound trite but it is time to think about getting suppliers in the last link of the productive chain ; factories that can develop your products (let’s say the first 3 of your 80/20 list) and that with a portfolio of own brands you can begin to improve your value proposition to your consumer who already knows you. Personally, I don’t like to buy the virus that people just repeat “the economy is slow, things are difficult, etc.” I feel better with my team and I start working hard on initiatives that allow me to help my company continue to grow, function efficiently and generate operating income. In the end, we have to be more and more ambidextrous, I don’t know what will happen in 2020 but my prediction is that we will grow above inflation.

And now, what’s next after COVID-19?

On Friday, January 31 of this year, I was giving a strategy conference and sharing with a group of around 150 businessmen, commenting from our particular point of view how we saw the development of the incipient 2020.

In this event we talked about the policies of the Mexican Government, the decrease in the national GDP in 2019 and the first news of a virus that was “bothering” the new year in China. I remember perfectly that I made a comment, an expression that my friends still remind me of, “You know, I know that many of you are concerned about AMLO, his idea of a country and the deterioration that Mexico is experiencing at an accelerated rate, but I am more concerned about what is happening in China, can you imagine if this virus hits them hard? What impact would it have on the world economy, especially the United States and therefore Mexico?

Mexico has always been in crisis, or at least it is something I remember since I was a child: our parents criticizing the politics and economy of the leaders in power; his theft; corruption and constant love for power that sooner or later leads them to defraud millions of Mexicans who voted for an illusion, for that change of leader that takes Mexico by the hand and that with businessmen, academics and society we can reach the dream first world we long for. Will our crisis be different this time?

On March 30, 2020, the Undersecretary for Prevention and Health Promotion, Dr. Hugo López-Gatell Ramírez, informed Mexican society that we were entering phase 1 (first of 3 stages) for the control and regulation of the spread of the virus. called Covid-19 and that the staggering of the closure of productive activities in Mexico was officially beginning. At that time we wondered, what will happen to the country’s economy? if we also come from economic problems, how will this aggravate the situation? In the absence of employment, social insecurity and crime, what will companies do to get ahead?

The closure of productive activities is considered to take place from March 30 to April 30 – information as of today – however, it is known by the media that it could last the entire month of May or even a few days in June, depending on great measure of how the contagion curve is “flattened”. The help from the Government to the business sector does not exist, the political discourse is above action and serious projects in economic matters, they will continue to talk about “adversaries”, “conservatives” and “fifís” as if only there was a vision of a Mexico that should favor some and not all Mexicans.

What will companies do and what is next after COVID-19?

We have from March 30 to April 30 to get depressed at home or to learn from what is happening to us, from valuing the little things that we don’t have today – simply being able to walk freely down the street, go to the movies or have a coffee with friends – Until reviewing the strategy of our company, as Steve Covey says “focus on your circle of influence”, then…

Where to start?

Analyze the reduction of the complete cash cycle of your company, from purchase to sale, and the time it takes to return the money to your bag. The task is reduce, reduce, reduce as much as you can. It is time to return your multichannel company, you cannot continue to depend on a single distribution channel, now you remember in how many talks you have addressed the subject “on line” and you have commented, “that is a project that I have in my company for the following year ”, because this time there is no next year, you have two months to lay the foundations to take your company to an “online” commercial medium, either by doing it yourself under the E-Commerce model, or through third parties under the Marketplace model, but now! Your price strategy for the return of our quarantine will be of vital importance because the dollar has increased by 25%, will you raise prices? Will you keep the same for a couple more months? Does the repurchase value not allow it because you are an importer? You know, this is not the time to make money, this is the time to survive, this is the time for the cash flow that will allow you to be back in the game in three more months, for now try to maintain the prices of before the Pandemic. Attention we always tell the client but now it’s serious, do you know why? Because when we return, half of the clients will be there, the other half will no longer be there, so it requires twice as much attention so that they help us to return little by little to where we were. Make digital promotion, use social networks, use its full potential, today it is the most powerful means of information in the world, so your company cannot miss it, not anymore. It depends on the type of company and your target market, depending on it is the type of social network that you should use, but you know, you have two months to discover which is the best for your product or service.

It is time to survive, to learn and to focus on the most important thing, your family, their health and of course you, if that is missing, what else do you want it for? We are going to stay at home using communication platforms -Go to meeting, Skype or Zoom are some of them- with our collaborators to return strong, intelligent and with a lot of learning.

The selection of an ERP: Choose intelligently.

When clients ask me; Mario, what are the issues commonly observed in most organizations that decreases competivity? Definitely not having an ERP, I answer.

In my experience as a business consultant, I have found that the technological dynamics and the evolution of organizations is so fast that 5 years ago what you constantly saw in companies were control problems based on the establishment of limits (such as the need to the creation and implementation of policy and procedure manuals, for example), just 5 years ago, thinking about evolving from control systems by limits to technological structures based on ERP solutions could be considered a kind of luxury – even for many organizations it is – but today not having an ERP is perhaps one of the most important reasons why a company can lose competitiveness.

However, what is an ERP?

Enterprise Resource Planning -for its acronym in English- is called large information systems with integrated business processes. It is the natural evolution of manufacturing planning systems (Manufacturing Resource Planning or MRP). Such ERP systems have traditional business functions; they include finance, accounting, sales, human development and processes; enable companies to effectively and efficiently manage the use of their resources (inventories, human resources, financial, etc.) through an integrated solution for the type of information processing needs of each company.

There is no doubt that every company needs an ERP, the real problem is how to select the right one for each company.

“You are right, I have no idea how I, together with my collaborators, could choose the best ERP for my company, much less what I have to analyze to select the best one”. Before I give you a guide to choosing an ERP I will share what I have found as risk factors that are repeated over and over again.

As can be seen, the selection of the ERP has the greatest impact and it is here that I wish to contribute with a guide for the best and most practical way to choose it.

Selection criterion number 1: The functionality of the ERP

The functionality of the system must have an important weight in the selection of the ERP, the aspects that define the functionality have to do with:

How complete is the ERP? It means that the solution that is presented must be adapted or have most of the system modules related to the main activity of the company, in addition to having clear support for its most critical processes. This evaluation has a formal structure and is based on the construction of business process maps, compared with the process maps of the “candidate” solution that is presented. This is a critical phase of selection, a black-and-white decision: does it suit my business or not? This means that if said comparison does not correspond adequately, the system should not be selected regardless of the “selling” arguments of those who want to sell the solution. Is the tool easy to understand? It is true that the level of executives who work with an ERP have a different mindset than those who in their professional experience have not, but this is simply because the mentality of working with integrated systems to work with those that are in silos of information is exponentially different. It does not mean that the people who are in the organization should leave because the tool is complex to use and it is an argument of the ERP company, “the system is good but your people are the ones that are useless”. Be careful, this argument is repeated a lot and my advice is to choose a simple system, not one that requires postgraduate studies to be able to use it.

Selection criterion number 2: Technical criterion

The selection of hardware and software is of great importance to approve the ERP solution, preferably the system must work with current information technology trends. Companies must be certain that their potential supplier will always have the possibility to grant system updates in terms of security in order to have the best use of the technology that will surely evolve in the future. The technical criterion must also reveal some aspects such as its stability, quality and safety. It is very common that on paper the system is perfect -or in systems controlled via demos- but in real environments it does not work properly, either due to speed or instability. In this criterion I highly recommend you to make a team of consultants who give you their opinion in technical terms, always independently of your information technology team and independently of the company that wants to sell you the ERP.

Selection criterion number 3: Budget

The company must budget in great detail, and must be sure that it can sponsor a project of this magnitude, that it can buy and implement the solution.

Some topics that I recommend reviewing are:

Software licenses necessary for the solution to run efficiently. All necessary hardware; servers, workstations, wiring, telephony, communication antennas, fiber optic connections, mobile equipment, etc. The cost of implementing the solution. In this case, I recommend reading the fine print of the contracts because it is very important to define the possible deviations of the project and their costs, in addition to the responsibility of each party. Preventive change management consulting. Remember that the change that the collaborator will undergo will be 180 degrees, so before any implementation of this magnitude, I recommend investing in consultants who help your collaborators prepare for the change that is coming for at least the next 12 months of workQuantify everything what ERP companies do not say: the solution is question, question and question. Ask until there are no doubts, preferably in that phase of the analysis and not when invoices arrive with surprises.

Selection Criteria Number 4: Service and Support

This criterion is really important because this is where the cost of the project can skyrocket between 7 and 10 times the cost of the software. The service and support that the ERP company can provide is of great importance to the success of the project. Most organizations face problems of all kinds, they can be technical or installation, tool customization or even severe security problems. In order for this type of difficulty to be handled in the best way, the ERP company must have a team of professionals with extensive experience to ensure support. One more piece of advice, include this part of the support in the contract so that you are legally protected in case it is not provided.

Selection criterion number 5: Evaluate the provider

This criterion is one of legitimacy, please, and let me repeat it, please, before signing a contract with the ERP company, interview at least 5 clients selected by you, not selected by them, when they make their first presentations and show you some of their clients, take note and interview them without notifying the ERP company, the interview aims to make you objective criteria, asking the aforementioned factors.

Selection Criteria #6: Research the ERP Company

Investigate their position in the market with respect to other companies, their success rate in their implementations, but above all, investigate the moral quality of the company. Remember, you are about to make a very strong investment and you are going to marry a company for at least the next 10 years, so it is best to do your research with whom. Dear friend, just like in marriage, if you select your supplier wrong, you will do law school as many times as you will visit the judge.

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