Joe Kratochvil, Clear Stone Solutions
Recently I had the opportunity to participate in a series of strategic planning sessions with a large petroleum marketer. I was excited to work with this company for several reasons. I had heard good things about this team, and have been tracking their growth for several years. Word in the industry is that they have ambitious goals, and solid plans for achieving them. It is with satisfaction that I can say they did not disappoint. The various business unit leaders within this organization comprise one of the most talented, goal-oriented teams I’ve had the pleasure to work with in the last several years. The ownership exhibits a strong dedication to the decision enablement of their team leaders. It was immediately clear that the progressive stance of the internal culture originated from the top down, and was a genuine part of their corporate DNA.
You might ask yourself after hearing this description of a company doing everything right, why they had invited a consultant to their planning sessions? The answer is a simple one, and I suspect you may experience similar issues in your organization: Their corporate back office solution, and the way it was forcing them to conduct day-to-day operations was becoming the single largest hurdle to continued business growth.
This is a common problem that slowly builds over time, and typically happens through the best of intentions. As growing companies expand and their operations become more complex, they require enhanced reporting and analytics capabilities to make vital decisions for their business. The volatility of the market drives the need for real-time business tools capable of delivering information for on the spot decision-making. Typical back office solutions that attempt to address this need offer the seductive mix of being a trusted vendor, the promise of industry knowledge, and a natural desire to solve problems for their clients. The result is often a tangled, ad-hoc sprawl of reactively developed customizations intertwined into the core back office system that inserts frustration into aspects of the business that has nothing to do with accounting.
Initially, these customized solutions seem like a good choice for the clients needs, but as the business continues to grow it becomes apparent that they are not scalable. Gradually your business processes and reporting capabilities grind to halt. Typically, software providers advocate a canned approach to specialized issues allowing them to reach the largest group of their customer base with the least work effort required. This is adequate for the majority of their client base, but as the industry contracts and individual marketers grow, the level of sophistication required to operate larger, often geographically disparate organizations cannot be met without substantial additions to the core system. As the demands of the client business continue to escalate, the various internal unit leaders begin to develop solutions of their own. They pull data out of the back office system into excel or other one off analysis options, and begin the downward slide into the hardships of a business strangled by its own growth. The result is a murky pool of inconsistent information, a reactive rather than proactive posture, and the continuous erosion of confidence in the entire process.
As I sat listening to this talented group of people explain their issues it was apparent they understood their situation. They correctly identified that the company had outgrown its back office providers’ methodologies and unorganized sprawl across the organization. This vibrant, progressive company was crippled by an accounting solution that had reached into places in the business where it was ineffective at best, and in some instances negatively impacting the day-to- day operations forcing them into the untenable position of management by spreadsheet. They understood the symptoms of the disease and the diagnosis, but did not have a clear plan of treatment for resolution.
The solution to the problem is simple. Understand what your back office software package is supposed to do for your business, and place it back into its rightful position in the corporate software portfolio. Your organization should not be a slave to methodologies that do not enhance and grow your business. This is no different than finding the right people resources to fill specific business needs.
A back- office system’s core capabilities are to keep a record of the company’s sales and purchase transactions and update the inventory as needed. Invoices, receipts, and reports can also be produced by the back-office system. Let the system operate as designed. If you have a growing sales force and they need a scalable, mobile CRM package, find one that makes sense for the business. If you have diverse, large-scale logistics needs, find a platform that will accommodate your particular business case. If your leadership team is not getting the business intelligence they need to make effective and profitable decisions, explore the various decision support options that exist outside the traditional energy marketer vendor lists. If your particular back office vendor balks at the idea of integrations between systems, this is a good indicator of their capabilities. This knowledge presents a strategic opportunity to find a vendor that understands the growth needs of your organization, and embraces those needs through solid integrations. This is one of the foundational benchmarks for true vendor/ client partnerships.
Back at our planning session, the team began putting together a technical roadmap that will marry with their strategic goals to technical solutions, and provide capabilities to enable long-term growth. We outlined what each business unit needed, explored what software additions would be required to fulfill those needs, and launched a solid plan that will help the business meet the coming changes. As I shook hands and walked out the door, there is no doubt that this exciting group is headed for continued success.
Joe Kratochvil is the Founder and Chief Executive Officer of Clear Stone Solutions. He rejoined the Clear Stone team after a two-year hiatus, during which time he accepted the position of President of JPM Resources, after having served as the Director of DELTA (a strategically focused resources team) for Atlas Oil. Before founding Clear Stone Solutions in 2011, he was Heritage Petroleum’s Director of Information Technology. He was responsible for development of the technical vision for the company, in addition to various strategic responsibilities across the organization. During his tenure he developed technology and processes to enable corporate growth in the areas of pricing, logistics, and inventory management providing scalable growth for the organization. web: www.clearstonesolutions.net tel: 812.319.5762 email: [email protected]
