Sunday, May 25, 2008

P2P: Pay to Perform

“Pay peanut, get monkey” Do you familiar with this quotes?

A company can get a low pay employee to do a job, but don’t expect a high quality result.

Actually, the salaries in my company is not bad, many people say it is above average if we add other benefits beside money. For example: the 8 to 5 working hour, rarely overtime, internet access, no fierce competition among co worker, etc.

What I learned after working for several companies is this, if the company doesn’t have the accurate tools to measure your performance, it is better to negotiate the salary as high as possible on the first time. It is because later you cannot be sure how you can climb the corporate ladder or get a salary raise, so better to get what you want from the start.
There are some big companies that still don’t have a KPI for every position. In this case, when doing the performance analysis for employee they tend to be subjective or they measure the ‘wrong’ KPI, like lateness, absence report, etc.

How can you perform, if the only measure for your salaries future is the absence report? That’s why you must put everything in early salary negotiation.

Wednesday, May 21, 2008

Standard Costing & Pricing

Not every business has a standard price for their product or service, especially service business. They can’t just put price tags or price menu for all their services. One particular business that has a very customize pricing is 3PL [Third Party Logistics], this includes transportation and vehicle operating lease. This is happen because the cost for selling the service itself wide-ranging.

So, estimating how much we want to sell for our services depend on how much the cost [cost plus method]. Also, for some companies, they also decide by seeing who the customer is [cost to serve method].

Cost estimating and analysis is challenging for many companies including mine. We got a long term impact from the risk in doing wrong cost estimation. Operating Lease business is a long term contract and we feel the impact, if we are wrong in setting the price, in the end of the contract.

One of our BPR project is to make standard calculation for costing and pricing. So every branch will have the same method when they calculating the cost and the price. We made standard of how to calculate all the cost factors not on the pricing itself.

We also going to record the cost structure in our system [SAP], so every key person knows how much the budget for each customer. The objective for this is to control the margin. For example, if we set a maintenance cost for US$ 5000 a year, then we can compare it with the actual cost in that year.

This is an important project and very complex because we must combining ideas from the entire key person. Also, changing the culture and made people do the new calculating standard is even more challenging.

I just hope that our CEOs have a commitment to make every one doing this. We are just the CEO prompter; the one who assist with the concept and do the paper work; in the end, it is the CEO who must ‘sing’ the concept to everyone.

Wednesday, May 7, 2008

Microsoft Excel - The blood of BD Analyst

Can you imagine doing an analysis work without software like Excel? A one day job of data analysis can be one week or even a month, what a waste of time.

As a business development analyst, I deal with a lot amount of data. Our job is to make that data useful information to make decision. Sometimes, if we already know what we are going to do with that data, it is a simple work with Excel. But many times, I must clean up the data, think about what kind analysis is the most appropriate, and build the modeling calculation in Excel.

I must say that Excel has help me a lot and I am still try to use it to the fullest.

Kinds of analysis or modeling that I usually made:
  1. Feasibility Study : this was the most comprehensive one I ever build.
  2. Capital Budgeting : for make decision to buy or lease a machine or vehicle or any kind of investment.
  3. Corporate Valuation : to decide whether how much the value of one company, usually we use this if we want to buy or sell a company.
  4. Incentive design : I build this for our new sales incentive scheme.
  5. and much more [I usually start some simple analysis and then develop it to a more complex one]