The StaffBalance Operational Efficiency model helps operations teams and IT departments to optimise their business resources, create greater transparency and generate greater operational efficiency.

One of the best ways to run an operational area such as IT is to run it as a business within a business.  This means that IT becomes a service to be bought and consumed, just like any other service on offer.  There are costs of producing the service, the various levels of complexity and the range of services on offer, as well as the IT consultant’s time.

Operational Efficiency from StaffBalance can help businesses to evaluate their spend on operations and IT, and help them to allocate those costs across the organisation.  StaffBalance can also help operations teams to become more cost efficient and more focused on the needs of their customers.

For more information about Operational Efficiency modelling call: +353 1 8336567

Traditional metrics such as revenue streams and market share are useful indicators of a company’s income and market position, but they don’t give you the full picture. Net profitability is the clearest indicator of how cost-effective it is to provide your full product and service suite to customers.

Once companies fully understand profitability on a customer by customer basis, their relationships improve.  The granularity of detail provided by Sales Optimiser gives your company leverage to give discounts to profitable customers and to provide an enhanced service level.

Sales Optimiser also empowers your sales team to negotiate better terms with less profitable customers – such as bulk delivery, more favourable payment terms and charging for value added services.  Pricing is made considerably more valid by the clear understanding of the cost-to-serve the customer.

For more information about Sales Optimiser modelling call: +353 1 8336567

In most large companies, there are multiple channels, complicated product sets, legacy data systems and even a widely dispersed organisation. Cost Controller from StaffBalance helps to pull the complex and diverse data together to make sense of large volumes of information.

The simulation modelling technology uses the data intelligently to identify opportunities for cost savings and improvements in operational efficiency.

Using the Cost Controller model, you can adjust your costs, your structure and your processes.

For more information about Cost Controller simulation modelling call: +353 1 8336567

Executives are now taking a more sophisticated look at customer profitability as a driver for business growth.  The StaffBalance Profitability Driver simulation model software can help you to gain a clearer understanding of the profitability of customers, people, products and distribution channels.

Traditional accounting systems don’t provide in-depth metrics on customer profitability.  Normal financial reporting does not require you to allocate your operating costs across your customer-base.  The reality is that sales, operations and administration costs are all costs incurred in serving a customer.

There are serious implications for a company that cannot measure and manage customer profitability.  These can include:

• Breakdown in relationships between customers and suppliers
• Excessive demand by customers for free services or heavily discounted products
• Over-servicing of unprofitable customers, due to lack of information.

Simulation modelling technology is used to help companies to calculate the profitability of individual customer relationships.  Fact-based data is used to build a model of your organisation and the technology that is used is a specially developed Time-Driven Activity Based Cost management simulation model.

For more information about Profitabilty Driver modelling call: +353 1 8336567

There is a way to understand exactly what impact staff reductions have on your business, your client-base and on your underlying profitability.  It is done using simulation modelling techniques – one of the most powerful and most realistic decision-making tools available.

The first step is to determine the staffing levels required to run a business successfully.  Simulation modelling is used to build a profile of how staff spend their time.  The modelling process takes the realistic capacity of your team into account – stripping out annual leave, sick leave, secondments and so on.  Once an authentic staff capacity level is identified, the next step is to work out the staffing time and unit cost for every process and product.

StaffBalance can give you the factual data you need to help you calibrate your resources structure.    Once the Staff Capacity model is implemented, organisations have greater certainty because staffing levels are now based on facts, not estimates.

For more information about Staff Capacity simulation modelling call: +353 1 8336567

View Case Study

We help companies to seize profit opportunities by reducing their costs, balancing their staff resources and maximising the profitability of their customers, products, and channels: all without disrupting mission-critical systems or people.

Some of our clients include:

• Bord Gais
• Irish Blood Transfusion Service
• IIB Homeloans
• Zurich
• Acorn Life
• KBC Bank
• Haven
• Woodlands Hotel & Country Spa

The customer who earns you the highest revenue may not be profitable.  Your operational teams might be busy, but not operating to their maximum capacity.   Your cost reduction initiatives may improve your balance sheet in the short term, but may also negatively impact future profitability.  The problem is that you don’t have the systems software to tell you factually, whether these statements hold true or not.

Ciaran McGowan, Managing Director of StaffBalance™ explains how Time- Driven Activity Based Costing – a significant enhancement to Activity Based Costing (ABC) provides powerful information to help you drive the profitability of your company.

As concerns about economic stability continue to affect business in Ireland and across the globe, corporate executives are under pressure to take a much more sophisticated look at profitability and cost management. This has brought a renewed focus on eliminating duplication and waste, reducing costs, and gaining a clearer understanding of the profitability of your people, products, customers and channels.  Failure to deal with this results in loss of competitive edge and market share profitability.

Few traditional accounting and finance systems provide valuable forensic information for senior executives on how to reduce costs.  Activity Based Costing (ABC) has been around for some time, but it has its limitations.

While there are recognisable benefits in using ABC – cost and profit enhancement opportunities and the facility to improve process efficiency – it can be complicated to implement particularly in multi-faceted organisations.    ABC also requires a considerable commitment in terms of resources; it is not scaleable and the results can be either inaccurate or too simplistic.  There has to be a better way.

Time-Driven Activity Based Costing is a simplified and proven solution to the complexity of ABC.  Time-Driven Activity Based Costing differs from traditional ABC in that it takes the analysis down from the high level activity volume picture,  to a forensic understanding of costs, profitability and process efficiency – right to where the information is most valuable at the individual transactional level.

The newly enhanced methodology uses simulation modelling, which allows you to examine in detail how you can optimise your resources.  This system enables you to implement intelligent cost cutting and generate greater operational efficiency so that you can maximise your business potential.

Benefits of Time-Driven Activity Based Costing

A number of trends have led to the growing need for and widespread acceptance of Time-Driven Activity Based Costing cost and profitability management solutions.

This simulation model offers you a way to cut costs and it highlights inefficiencies.  Time-driven Activity Based Costing gives you a factual perspective on the following areas:

• Elimination of duplication and waste
• Cost reduction
• Understanding the profitability of people, products, customers and channels

The simulation model is easy to implement and it both leverages and works alongside existing investments in people and technology.  Results are immediate and return on investment is typically achieved in less than twelve months.

The other great benefit of Time-Driven ABC is that it has full trace-back capability.  Feeds come from the General Ledger into the simulation model, and they can be traced back each month to ensure there are validated from the GL to the customer.

How Time-Driven Activity Based Costing works.

With the old ABC method, companies were forced to survey employees on how they spent their time – and compilation of the results – which tended to be flawed, took up a significant amount of time and resources.

Not so with Time Driven Activity Based Costing.  Instead of surveying employees, the average availability of staff to complete operational activities is calculated. That means that the practical capacity of the resources available is computed as a percentage of the theoretical capacity.

The methodology

The traditional ABC model surveyed employees to find out how their work was allocated on a day by day basis.  The new Time-Driven model begins by estimating the practical capacity of available resources as a percentage of the theoretical capacity.  From the start, therefore, you are creating a more realistic model of the resources available.

To illustrate how it works, we use an example adapted from Robert Kaplan and Stephen Anderson of the Harvard Business School. If you were to look at the practical capacity of a customer services team, stripping out annual leave, sick leave, maternity leave, and training, you might find that the practical capacity of the team is 80% of theoretical full capacity.  So if a person is theoretically available to work 40 hours per week, they are in practice available to work 32 hours per week.

A customer services department employs 28 people to do frontline work.  Each employee works 8 hours per day.  In theory each worker is available for 31,860 minutes per quarter.  Their practical capacity is 80% of that or about 25,000 minutes per quarter per employee.  This is a total of 700,000 minutes in total for the team.

The cost of supplying the capacity is €560,000 in overhead costs. That means that the cost per minute of supplying capacity is €0.80.

Calculate the time it takes to perform one unit of activity

Having calculated the cost per time unit of supplying resources to the business’s activities, the model next works out the time it takes to carry out each unit of activity. These numbers are obtained by interviewing or observing employees. No surveys required. Time Driven Activity Based Costing focuses on the length of time it takes to complete an individual task, rather than the percentage of time an employee spends doing it.

So in our example – employees spend:

• 8 minutes processing orders
• 44 minutes handling an enquiry
• 50 minutes performing a credit check.

The cost driver rate can now be calculated by multiplying the cost per minute rate of €0.80 by the number of minutes it takes to perform each task. This means that the cost-driver rate for processing orders is €6.40; handling an enquiry €35.20; and performing a credit check €40.

Once you have calculated these cost driver rates, you can assign costs in real terms to individual customer transactions as they occur. This information alone is very powerful in negotiating with customers and in the pricing of new business.

Decision making based on activity cost

Time driven ABC enables managers to report their costs on an ongoing basis in a way that reveals both the cost of a business’s activities and as well as the time spent on them. You have information also on the difference between the capacity supplied and the capacity used.

This gives you the opportunity to review unused capacity, or to look at where there is not enough capacity to satisfy customer requirements.  By factoring in the real costs associated with each customer, you can make adjustments – both operational and financial – that will favourably impact your bottom line.

The simulation model also highlights resources gaps and spare capacity, and helps you to identify opportunities for resource management which will contribute most to business profitability.

The outstanding benefit of the simulation model is that the information is entirely made up of proven factual figures – so that any decisions you make are based on reality.  This means that you can be confident going to board level, that the resourcing capacity that you require is fully supported by accurate information; that you maximise profit per individual customer relationship and that you minimise costs.

Managers can easily update their simulation model to reflect changes in the operating environment and to measure improvement in efficiencies and costs.

About StaffBalance™

StaffBalance™ delivers an innovative cost and profitability management solution to financial services, insurance and utility companies helping them seize profit opportunities by reducing costs, balancing staff resources and maximising the profitability of customers, products, and channels:  all without disrupting mission-critical systems or people.

The company delivers an innovative profitability and cost management software solution.  This practical and effective decision making toolset helps companies quickly identify and build profitable revenue streams, manage staff resources more effectively and understand and control the underlying cost structure and profitability of customers, products and channels.

The StaffBalance™ client base includes: Bord Gais, KBC, and Zurich.  They have already saved their customers over €1m in costs.

Ciaran McGowan, Managing Director, StaffBalance™ can be contacted at: 087 051 9863.

It came as an enormous surprise to a sales director of a major corporate company, when he discovered that his biggest clients were losing the company money. All that time spent negotiating deals with these particular clients to keep them on side – delivering the goods to tight deadlines, providing service above and beyond, building relationships with key decision-makers – all yielded a high revenue but not a profitable revenue.
For anyone engaged in selling, the crucial question is: Can you tell which of your customers are profitable and which ones actually cost you money to serve?

Company executives are taking a more sophisticated look at customer profitability and in particular cost-to-serve as a driver for business growth.

There is a generally held view that the Pareto Principle also known as the 80:20 Rule holds true for all businesses: 80% of profit is derived from 20% of customers. However, new light is shed on customer profitability by Professor Robert Kaplan, of the Harvard Business School and his research shows that:

• The most profitable 20% of customers deliver between 150% and 300% of profits
• The middle 70% of customers are at breakeven level and
• The least profitable 10% of customers lose the company between 50% and 200% of total profits.

This means that often, some of your largest customers turn out to be the most unprofitable. The Whale Curve is a useful graphic to illustrate how this works.

The high profitability of the top tier of customers balances out against the unprofitable lower tier of customers so that you achieve your 100% profitability figure.

There are serious implications for a company that cannot measure and manage customer profitability.  These can include:

• Breakdown in relationships between customers and suppliers.
• Excessive demand by customers for free services or heavily discounted products.
• Over-servicing of unprofitable customers, due to lack of information.

Download the full article.

Irish Time-Driven Activity Based Costing consultancy, Staff Balance have been using MindGenius since the company was started 3 years ago, and believe the biggest benefits the software has brought them are reduced costs and faster turnaround times.

According to Staff Balance, a typical consulting assignment with a medium-sized customer could take 30 days, if done using standard documenting techniques, but once mind mapping is used, the process is shortened threefold, down to just 10 days. The saving of 20 days could mean a saving of €20,000, so they believe that the ROI for a MindGenius license can be as much as thousands of percent and the software pays for itself in the same week.

Staff Balance use MindGenius to map out their customer’s business processes and feel it allows them to arrange all the gathered information in a way that is not possible with lists. In fact, they feel that the fast turnaround of their consulting service would not be possible at all, without using mind mapping, particularly with MindGenius.

Their clients include Bord Gais Energy Supply – all Ireland’s gas and electricity supplier, Zurich Insurance, Acorn Life, KBC Bank, IIB Homeloans, Haven Mortgages and other high-profile companies.

The Staff Balance range of products and services allows customers to find out the optimum number of staff they require, frees up the sales team to work on sales, allows for focus on the most profitable customers, sales channels and products and overall helps significantly reduce costs and increase income.

All Staff Balance Business Analysts and the Management Team use MindGenius in front of customers and for optimizing their daily work.

Romualdas Maciulis, Technical Director, Staff Balance Ltd thinks:

“MindGenius lets us communicate the key points across much faster and we feel it is the best tool you can use for mind mapping, particularly when you are working with extremely large maps. MindGenius is the only tool on the market that can work with large maps without breaking, we tested them all – only this one shines under pressure.”

This is down to the MindGenius Map Explorer, which allows them to focus in on any area of the map, making it more manageable.

Romualdas also had a daily productivity tip he wanted to share:

“It is very effective to have a “master mindmap” of all your activities, projects and responsibilities. Users can leverage MindGenius linking capability to link to specific websites, portals, documents and even other mind maps. And now, with the speed improvement of MindGenius 3, and the added export functionality – I’m even more convinced that MindGenius is the best mind mapping software there is.”

Read the online article here.