Crises Drive a Need for New Business “Maps”

Over the years, I’ve written multiple times about how BI spending increases during hard times. When we were planning the Excel 2007 release at Microsoft for instance, we researched the spending trends of the dot-com crash and found that IT spending had declined in every single category except one – Business Intelligence – in which investment had INCREASED during the tough times.

When a crisis hits, suddenly you can’t trust yesterday’s map, and you need to draw a new and accurate one quickly.

And then, around the time I was starting P3 in 2010, I looked at IT spending during the recession following the 2008 crash. Again, spending went down in nearly every category, but this time there were TWO exceptions – BI and Cloud. A good omen for Power BI in the years to come.

The common thread is that crises invalidate much of the tribal wisdom and historical “standard operating procedures” developed during sustained booms. Once your business has found a good groove, it doesn’t take much new brainpower to simply do the same thing as yesterday. But when a crisis hits, suddenly you can’t trust yesterday’s map, and you need to draw a new one (and an accurate one!) quickly.

But Even Positive Change Requires Agility!

The COVID-19 crisis has predictably brought suddenly-adverse business conditions to many of our clients, and as outlined above, we’ve been helping them respond. Power BI – and the broader Power Platform – is really shining in this moment. Agile BI and agile systems adjustment, on the front lines and with short lead times, are really proving their mettle.

But as a bit of a “feel-good” story, today I thought we’d share a case study in POSITIVE adversity.  Even when things take a sudden turn for the better, you still need to adjust quickly.

In late February, we conducted a 3-day consulting kickoff sprint with SerVaas Labs – makers of Bar Keepers Friend.  COVID-19 was definitely on the radar but social distancing and travel bans were not yet in place, so this was one of the last weeks for biz-as-usual in the USA.

The timing turned out to be auspicious, as everything changed in March.  Here’s a story that I hope you find encouraging and stimulating, relayed via an interview with their CFO.

Welcome Matt Selig, CFO at SerVaas Labs

Left: Original packaging at the museum in SerVaas HQ
Right: Current packaging

Hi Matt.  How long have you been at SerVaas Labs?

Twenty years, CFO for all of them.  Long enough to also be the unofficial curator of our product museum at HQ.

For a worldwide brand with great recognition, you run pretty lean – how do you do that?

Yeah, it’s true.  We co-locate all of our job functions – corporate, sales, marketing, and manufacturing – all in the same facility outside Indianapolis.  Whenever you buy a package of Barkeepers Friend, it came off an assembly line down the hall from my office.  We even manufacture much of our packaging here too. 

Being as compact as we are eliminates a lot of redundancy, which is great for overhead costs, but it also means we all wear a lot of hats.  As CFO, for instance, I’ve also been de facto BI Director for years.  A lot of requests for data come to my desk, and last year I probably spent 20% of my time in Excel, cobbling together reports for others.  That might sound like a lot, but sometimes it was easily half a day’s work for a single ad-hoc request before their inevitable follow-up questions. 

When did you have your “There’s Got to Be a Better Way” moment?

Years ago <laughs>.  But it’s so hard to find the time and energy to blaze a new trail.  Plus, you don’t want to get suckered into the wrong thing and lose time and money on a dead end.  For example, we get approached by lots of industry-specific, boutique software companies promising to deliver amazing reporting out of the box with no effort on our part, and it’s always tempting to take the plunge.  Their stuff always LOOKS good.  But again, there’s so many of them, and it all sounds a little too good to be true, so we never quite got brave enough to sign a deal.  In hindsight, I’m super glad we didn’t.  Power BI has proven to be many times better than anything we were ever pitched on before.

So what got you thinking about Power BI?

No kidding, I saw a Power BI book on my wife’s bookshelf.  I flipped through it, didn’t understand much of what was in there, so then I went to YouTube and watched a few videos.  I saw a demo of a sales dashboard and I was hooked.

I sat down and sketched a Sales Dashboard for us.  I carried that sketch with me for a year before working with you to make it real.

Sketches are often the best Power BI "requirements docs"
Matt carried this sketch with him for a year as an aspiration and rallying cry

“Even by the end of the first day, we already had dashboards worth showing to the team, and were making discoveries about our business that we’d never had before.”

Of course, Power BI doesn’t promise out of the box results, so we knew we needed help.  And that’s where the next uncertainty shows up – who do we hire to help us?  It’s back to that same old uncertainty – in many ways it’s better to do nothing than to make the wrong choice.  It’s so hard to know, when you hire a consulting firm, if they’re truly competent.  And even if they are, then there’s the danger that they turn out to be predatory, and one day you wake up and realize you’re spending half your budget on consulting.  So again, we hesitated a bit.  That’s why we ended up coming to one of your classes before we hired you.  We wanted to get to know P3 a little better, and we’re glad we did, because it gave us the confidence to bring you in for more help.

One of our consultants worked with you for three days in what we call a Jumpstart.  We like to think it’s a pretty unique process.  What’s your reaction to it?

It’s fun!  As CFO I don’t normally use that word to describe a project, but it was exciting.  Of course, the reason it’s fun is all the progress we made in a short period of time.  Everything moved quickly.  Nothing cumbersome.  Just laptops, data, whiteboards, and post-it notes.  We sat down, loaded data, and off we went.  As we worked together we got to watch our data come to life, almost like those time-lapse videos of buildings being built, but in the span of three days.  Even by the end of the first day, we already had dashboards worth showing to the team, and were already making discoveries about our business that we’d never had before.

P3's Power BI Jumpstart methodology provides results in the first week, and in this case the first day.
Top: a peek inside the jumpstart process
Bottom:  reviewing the dashboard in progress at the end of day 1

We like to say “results in the first week,” so having something useful in a day isn’t unheard of, but it’s pretty good even by our standards.

We’ve been working with the exact same data sources for a long time, so I think maybe we came to the table more prepared than average.

And then…  COVID-19

imageAbout two weeks later, the virus landed pretty hard in the USA.  What happened in March?

Well, we sell cleaning products.  And in March, our sales exploded.  In the good way.

If you can, walk us through the difference in managing this new reality with your new dashboards versus if you’d still been doing things the old way.

The first difference is in how quickly we were able to spot the change.  With our new dashboards, we were able to see the spike almost immediately, because the dashboards update every 24 hours with the prior day’s invoices.  Before, everything had to go to Accounting first, and then someone like me would go to Accounting and request a data dump of our latest transactions, and then crunch those in Excel.  Everyone involved has a different primary job, and with all that manual labor, it’s easy to put if off and not see a change until a few weeks into it.

But you also did have some standardized, non-Excel reporting before Power BI, so why wasn’t that good enough for quick detection?

Yeah, we’ve had Crystal Reports forever.  But there wasn’t a lot of intelligence in those reports – they were more like a raw dump of facts.  Hard to spot trends in those reports for instance.  As soon as you have a question that’s just a touch different from what the reports were built to answer, we had to go get raw data from Accounting and crunch it in Excel.

Once you spotted that things seemed to be changing, what happened next?

Lots of questions.  First, do we trust that the change is real?  We needed to poke around a bit to feel confident, and the things you built for us are great for that.  Break it down by customer, by region.  We were able to quickly spot check and validate that this was truly happening.

Second, what’s driving it?  It’s not like sales went up everywhere.  It was all being driven by specific channels, specific retailers, and that was very easy to see in the Power BI reports.  We had a grasp on all of this almost immediately.  It was night and day versus before.

I love it.  We like to say that nothing matters until it translates into action and improvement, so what actions did you take in reaction to these insights?

Everyone had different actions they needed to take.  Which meant everyone needed to see different information.  It’s kinda back to the questions thing again, but at the next level of detail – everyone needed slightly different pictures.  And again, the new dashboards addressed all of those individual needs without needing to come back to me or Accounting.

This whole process – noticing the surge in sales, validating that it was legitimate, understanding the drivers, and then everyone breaking it down independently to the next level of detail they needed to act on – was so seamless that it basically faded into the background.  We were all just so focused on responding to the news, and using the reports, that I didn’t really think about the reports.

But reflecting on it now, it’s pretty clear that the whole process wouldn’t have even happened if we’d still been using Crystal and Excel.  No way we would have slogged through it all – we only would have had time to scratch the surface of what the data was telling us before having to make changes. 

Power BI helped SerVaas decompose the overall upward surge into its components - and not all of them were up.
Decomposing the overall upward surge: Some customers’ orders had dropped to
zero, allowing SerVaas to redirect production where it was needed.

“It used to take us hours, days, or sometimes weeks to answer a question.  Now it’s like, if I can’t answer a question in seconds, something’s wrong.”

For instance, we saw that some customers orders had fallen to zero, while others were up 40% and 120%.  (Some non-essential retailers closed down completely, for instance, whereas grocery stores did not).  This allowed us to redirect some of our output from the “zero” customers to the “exploding” customers, preventing us from over-producing.  But we still needed to ramp up production quite a bit, including running the entire factory during second shift as opposed to only running a third of the equipment, which is a big change with many details.  We were re-organizing our entire operation on the fly, so it was great that the data part was easy.

Ah, you hit two of my favorite themes!  First, when things are going right, BI isn’t the “star” of the show – the people are (their actions, their discussions), with BI in the background.  Second, speed isn’t just “we get things done faster.”  When you’re so much faster at analyzing a situation, it makes the difference between doing a comprehensive job (and being fully informed) versus not doing it at all (and leaving it to guesswork).

Yeah I remember those themes from the class.  But it’s one thing to hear it and another thing to live it.  It used to take us hours, days, or sometimes weeks to answer a question.  Now it’s like, if I can’t answer a question in seconds, something’s wrong <laughs>.

Another great surprise is how quickly everyone shifted from using the old reports to using the new dashboards.  At first I expected there to be some holdouts, but now literally everyone has switched to the new dashboards without anyone having to force them.

Other benefits and the road ahead

What are some of the non-COVID-related benefits you’re seeing over your first two months?

Many people now have more time to do their main job (Sales, Accounting, Marketing, Finance) because they no longer get bogged down in data processes.

It’s improving a lot of workflows.  For instance, once a quarter, we have to provide some of our customers with an audit of sorts – it’s just a cost of doing business with some of the larger retailers.  So, once a quarter, one of our salespeople used to spend twenty hours preparing these audits.  That may not sound like much, but that’s two full weeks a year that this salesperson is not doing their main job – selling.  Well now that process is down to 2 minutes rather than 20 hours – and that’s purely a side effect of the work we’ve done with you so far.  We didn’t even explicitly set out to streamline that workflow, but we got it as a bonus!

So right there, that’s two full weeks each year spent selling rather than paying a tax.  That can be a big deal – a new customer perhaps, or improved placements at existing customers, either of which is good new revenue.  But it also saves Accounting some time too, since THEY used to have to run the reports as an input to this process.  In general, I think we’re saving a full day per week of a single accountant’s time, no longer fielding ad-hoc requests for data.  That’s more than two full work months per year!

There’s a new theme for you:  many people now have more time to do their main job (Sales, Accounting, Marketing, Finance) because they no longer get bogged down in data processes.

Yeah you beat me to it!  I’ll definitely be using that going forward.  So what’s next?

To use your “silo” terminology, this first phase has been all about the Sales silo.  Purely revenue focused.  Next, we’re working with you on the Cost silo.  Inventory, labor, capex, the works.  We’re very excited to begin seeing Margin metrics in our dashboards, because as you know, high revenue doesn’t necessarily mean high margin.  All of that agility I talked about earlier – responding in real time, seeing the components of the change, breaking it down to the next level of detail so everyone can take action – we’re going to see all of that now applied to Margin as well, which is super exciting.

Power BI is amazing at spanning the silos of your business to provide an all-up single view.

And of course, we’re still improving on the Revenue side of the equation.  We weren’t done after those first three days, even though it was an amazing start.  So we’ve been working with Justin remotely on finishing that stuff but also… advancing it.  Going in, we knew we needed a bunch of things, but once we got into it and saw what could truly be done, we saw a bunch of new opportunities that we wanted to follow up.

“I hear things like ‘game changer,’ ‘astounding,’ and ‘mind-blowing’ all the time now.”

Another great thing about this is how we are now able to make some of the changes on our own, while utilizing P3 for the big stuff – like adding the entire new Cost silo to the model, or particularly-challenging calculations.  I like that you set us up to be self-sufficient to the extent we can be, while supporting us on everything else.

In our classes, we describe Power BI as life-changing, rather than “just” career-changing.  So far, has it lived up to the hype?

It has!  I think it’s even better than the hype, in a way, because when you see it happen in your own business, it’s way more exciting than hearing others’ success stories.  Nothing prepares you for hearing team members down the hall excitedly shouting from their offices about the new dashboards, or for all the audible gasps you hear when people see something for the first time.  I hear things like “game changer,” “astounding,” and “mind-blowing” all the time now.  Like I said before, it’s one thing to be told about it, and another thing to live it.

It’s amazing that the core technology underneath Power BI is now ten years old and yet we still seem like early adopters.  We went from feeling old-fashioned to cutting edge in a very short period of time.  There’s a lot of competitive advantage to be had there and we’re just getting started.