Data-Driven Management Samv Notes PDF

lOMoARcPSD|12145814 Data-driven Management samv en notes Marketing (Hogeschool West-Vlaanderen) Scan to open on Studocu Studocu is not sponsored or endorsed by any college or university Downloaded by Emmanuella ([email protected]) ...

lOMoARcPSD|12145814 Data-driven Management samv en notes Marketing (Hogeschool West-Vlaanderen) Scan to open on Studocu Studocu is not sponsored or endorsed by any college or university Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 Data-driven Management Theory 1 Introduction 1. What are the main processes in a company and what software is being used? 2. What data is generated in which business process? 3. What are the KPI’s in each process? 4. How can we make efÏcient dashboards? 1.1.1 What are the main processes in a company? 1. Operations 2. Purchase (and logistics) (inputs) 3. Sales (and marketing) (output)  Inputs are being transformed into outputs. 4. Finance (revenue – costs = profit / inkomsten – kosten = winst) 5. HR (you can’t do things without people)  All these things generate data  summarised in a dashboard in business intelligence  You need people who take decisions and guide the ship Management = about taking decisions – all day long “should we invest in a new warehouse?”, “about the cost saving exercise: how many people do we have to fire?”, “why are sales dropping in Asia? What can we do about it?”, “what is the average margin on our last 10 projects?”, “what is our EBITDA compared to our biggest competitor?” 1 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814  If you want to be a successful manager, it is about taking informed decisions based on data.  do it with the right knowledge: knowing the process (step 1) Right software? Bring in the ERP (enterprise resource planning) software CEO Sales HR Finance Operations  Problem? The departments are not linked  Normal use case: if you fill in a customer in the sales department, it is logical you find the person in HR  ERP software: combining all the different softwares into 1 (1 software & 1 database) 2 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 Advantages of an ERP system: 1. A customer, a supplier, an article, an employee, etc. … is only entered once instead of 10 different applications. It saves time and limits the risk of errors and duplicates. 2. You can more easily link processes to each other: e.g.: a sales is converted into a production order and all information is automatically transferred. 3. Data is in one large database, so it is also easy to link to each other, for example to create reports (business intelligence). 4. No data on your own computers, one point of truth, if someone leaves everything is still available. There is a lot of ERP software on the market, and what is popular also depends on the region.  SAP  Microsoft  Odoo  Sage Dynamics 365  Oracle NetSuite Business Central Do all companies need complex ERP software? Think of differences related to  NO, depends on a lot of factors the processes o Size of a company Zelfstandig vs bv. Proximus  Sales & marketing o Sector  Purchase & logistics Ikea vs PWC, KPMG, Deloitte, EY  Finance o Market  Operations bv.: bakker om de hoek vs. Samsung All these variables determine which software is the best fit. Sometimes integrating is the best option: Sometimes it is better to have a few easy stand-alone solutions and integrate them, 3 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 rather than having a complex ERP system. Especially for small and mid-size companies combination of integrated tools might be the best solution And is ERP sufÏcient for all companies? For large and complex companies, ERP will be the core of their processes, but for some functionality they will need extra software that is not included in standard ERP. This can be:  Custom development on the ERP system  Integrations with other software API = Application Programming Interface More and more software runs in the cloud and can be integrated using the API 4 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 Development from scratch? Business intelligence (= crucial) Important to build clear, interactive and user-friendly dashboards Business Intelligence to the next level: the AI hype = Very convenient to do daily ‘text-based’ tasks = Big tech with massive amount of data BUT... There are also a lot of opportunities for normal companies with a normal database to get more out of their own data! > MACHINE LEARNING > Also a very good reason why structured and intelligent data management is important! You are building a treasure of data that can lift your business to the next level 5 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 Machine learning 2 Sales & Marketing Sales Funnel Customer Success = How to onboard a client efÏciently and optimise recurrent revenue? = Customer Succes Manager / Account Manager / Service after sales 2.1 Marketing Inbound Marketing Outbound Marketing Company: "My product is the best" Customer: "I did my research and I really need this product" Old school:  TV-reclame Modern & digital:  Billboards  Content marketing  Radio commercials  SEO (search engine optimization)  Magazine ads  SEA (search engine advertising)  Flyers  Social Media  Sponsoring  E-mail marketing  Cold calling 6 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 What to choose?  Old school marketing is not dead: it is needed to keep brands top of mind (TOM).  All have their value and what is useful depends on the target group and the goals.  The role of a marketeer is to come up with the right marketing mix that is included in the marketing plan. 2.1.1 Content Marketing Start with a clear professional website! Website = the end goal online where the conversion takes place = Blogging, Podcasts, Infographics, eBooks, etc... > ChatGPT for the win! By offering useful content that people are really looking for, you attract potential customers People are not stupid, so try to sincerely provide correct information and don't make the standard sales pitch. Typically: sharing tips & tricks, using references, referring to other interesting content,... At the end you can mention your name and solution, but subtly Read more: https://www.teamleader.eu/nl-be/blog/de-content-marketing-mindset 7 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 2.1.2 SEO & SEA How did Google become so big (& rich)? As an advertiser if you can be on top at the moment a potential customer looks for a solution = very powerful = you are willing to pay for that position Smart guys at google made an auction out of it  SEA SEO 8 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 How to be on top of the organic search results? = full-time job = free SEA How to be on top of the sponsored search results? Is a kind of auction. Your position on a certain keyword is determined by different factors (weighted algorithm):  Your bidding in €  The quality of the advertisement  The relevance of the landing page => So it is not always the competitor that puts the most money on the table that wins = sponsored ads on the Google Search platform = payed To SEO or SEA A smart strategy can be to start with SEA to have first visitors and the moment your SEO starts to work, you can phase out the SEA 9 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 How did Facebook/Meta become so big Imagine Howest wants to attract new students from the region = Targeted advertisement = You only pay for potential customers that are in your target group  Success rate  Email marketing You don’t send thousands of mails with a regular email client, companies use dedicated tools for that. There are many tools, but some of the most used are: These tools also include:  Template engines  GDPR proof functionality  Statistics: received, clicked-on, opened, unsubscribed, …  Follow-up actions Conversion Conversion rate = of all the visitors, how many did the desired action?  “An action” can be very different: subscribe to newsletter, make a free account, buy an item on webshop,...  Don’t be too optimistic: in some cases a conversion rate of 5% is very good! Of course you can boost your total conversion at two levels: Total conversion = website visitors x conversion rate What are the most important KPI's of a marketeer? General marketing The cost per lead (cpl) or customer acquisition cost (cac) lets you Cost per lead know how much money you spend to get each lead. A customer loyalty and satisfaction measurement taken from Net Promoter asking customers how likely they are to recommend your Score product or service to others on a scale of 0-10. NPS = % promoters - % detractors (promotors: 9>10; detractors 0>6) 10 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 The return from a marketing investment divided by the costs of Marketing ROI the marketing investment. The percentage of customers who stop doing business with an Churn rate organization over a period of time Digital marketing Cost per Click: how much money you pay for one click on your CPC ad. Click-Through Rate: what percentage of people viewing your CTR advertisement or button in an email find it compelling enough to click through for more The percentage of visitors to your website or digital platform who Conversion rate take a desired action, such as making a purchase, signing up for your newsletter, or filling out a contact form. Return on Ad spend: it compares the revenu of the ad with the ROAS money you have spend to publish the ad. Sales funnel 2.2 Sales Sales funnel 11 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 What makes someone a good salesperson? Sales = statistics  The more qualitative leads in your funnel, the better game A certain percentage will be closed Follow-up is  Call back and each time they don't answer, schedule a everything new call If they say they need more time, ask how much and schedule a new call Find the critical points they are missing and try to find a work around or adapt your offer Always act and do as you promise > gain trust Make transparant and beautiful quotations and leave room for negotiation After sales! A happy client is a recurrent client To do this efÏciently you need a good CRM Tool  CRM = Customer Relationship Management 2.2.1 CRM 12 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 What are the most important KPI's of a sales manager? Monitoring total sales Qualitative Of all the leads that come in, how many have real potential leads/leads Sales cycle How long does it take to close a deal? length Customer Acquisition cost: dividing all sales and marketing costs CAC by the number of new Customers gained within a specific period Customer Lifetime Value: shows how much you can reasonably expect the average customer to spend with you over their CLV lifetime. Can be calculated for an individual customer, a customer segment or for all customers How many deals are expected to be closed coming periods (can Forecast be monthly, quarterly, yearly) Lead sources Where are the leads coming from and what how many leads from success which sources turn into deals Reasons for loss What are the (patterns in the) reasons a deal is lost Monitoring individual salespersons A sales manager will monitor the time between the moment a Time to first lead comes in the funnel and the moment a sales representative action gets in touch with the prospect Total sales per How much has each individual sales representative sold over a sales person certain period of time Number of sales Over a period of time: how many quotations were send, how activities many calls were made, how many meetings were held, etc... A sales representative or a sales team gets a sales target (how much should be sold in a certain period). A Sales manager will Target achieved monitor if these targets are achieved. Depending of reaching the goals a bonus will be paid. 13 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 3 Operations Roadmap: 3.1 BoM = Bill of Material = detailed list of the components of a product Static vs Dynamic BoM:  Static: one standard product for all customers  Dynamic: basis is standard, options are customizable BoM will also be used to do cost calculation: Example of a chair Quantity Description ID# Unit Price Total Cost 1 Back 6TU8 $5/Unit $ 5.00 4 Legs 5DR $5/Unit 20.00 1 Seat 2PC $10/Unit 10.00 5 Nails 1” $0.50/Unit 2.50 Total Project Cost $37.50 BoM Tree at complex manufacturing processes 14 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 3.2 Work Centres Ice Cream production hall: At each work centre some parameters are defined:  Capacity? How many ice creams can be shaped simultaneously  Setup time: How much preparation time?  Cleanup time: Cleaning up? Transport? 3.3 Routing and operations 15 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 3.4 Manufacturing order Work order:  When a manufacturing order is confirmed  Automatically the right work orders are created and send to the right work centre 3.4.1 Definitions MRP (=Material Requirements/Resource Planning) An MRP system will calculate what materials and components are needed and in which 16 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 quantity, based on the sales forecast, inhouse stock and production capacity. Based on the MRP a production schedule or purchase program can be automatically created. WMS (= Warehouse Management System) A system and software to organise the Warehouse. WMS controls the position and localisation of the goods in a warehouse, plans the order handling based on information coming from an ERP system and controls the physical good flows. QC (=Quality Control) The control mechanism to check the quality of every incoming component and outgoing finished product Just-in-time manufacturing To match supply and production in such a precise manner in order to limit the stock to a minimum. Deliveries are just in time for the production process, so there is no need to put anything in the warehouse. This decreases the inventory costs drastically and boosts profit. 3.5 Demo Manufacturing in Odoo 3.5.1 KPI’s What are the most important KPI’s of an operation manager? Measures the quantity of goods produced per unit of input, such Productivity as labor or machine hours. The time it takes to fully produce one product from start to Cycle Time finish. The Throughput KPI measures the production capabilities of a Throughput machine, line, or plant; also known as how much they can produce over a specified time period. Downtime The total time machines or production lines are not operational. Manufacturing The total production costs divided by the number of units cost per Unit produced. The number or percentage of products rejected by customers Customer Rejects due to quality issues, indicating customer satisfaction and product quality. Overall Equipment OEE measures the total effectiveness of a production process by Effectiveness considering availability, performance, and quality. (OEE) Productivity “The productivity of our milling machine has dropped due to a lack of maintenance” Productivity = Output/Input Eg. Milling of iron plates 17 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814  2019: you could mill 5 plates in 4 hours 2024: we can only mill 4 plates in 6 hours  Productivity 2019 = 5/4 = 1,25 plates per hour Productivity 2024 = 4/6 = 0,67 plates per hour “The labor productivity of Ireland is three times as high as Mexico” Labor Productivity = Output / Input = GDP (Gross Domestic Product)/Total Hours Worked Ireland GDP = $630 billion Labor productivity = $630 billion/4,5 billion hours = Total worked horus = 4,5 billion $140 per hour Mexico GDP = $1.800 billion Labor productivity = $1.800 billion/40 billion hours Total worked hours = 40 billion = $45 per hour Throughput "The throughput of the car parts production line is 169 parts per hour" Let’s consider a production line or making car parts:  Total Output: 9,550 car parts were produced over 6 days.  Operating Hours per Day: The production line operates for 9.5 hours per day.  Downtime: There was 1.5 hours of machine downtime over the entire period.  Effective Production Time: (6 days × 9.5 hours/day) - 1.5 hours = 56,5 hours. Throughput= 9.550 parts / 56,5 hours = 169 parts per hour Manufacturing cost per unit 18 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 OEE (Overall Equipment Effectiveness) OEE = a measure of how well production equipment is performing. It combines three factors: Availability, Performance and Quality  Planned production time: 8 hours (480 minutes)  Downtime: 40 minutes (machine breakdowns, cleaning)  Availability: (480−40)/480 = 0,917 = 91,7%  Ideal cycle time: 1 minute per unit  Actual output: 420 units (should have been 440)  Performance: 420/440 = 0.955 = 95,5%  Good units: 400 (20 rejected)  Quality: 400/420 = 0,952 = 95,2% OEE = Availability x Performance x Quality = 0,917 × 0,955 × 0,952 = 0,833 or 83,3% 3.5.2 Exercises Your company assembles electronic devices, and recently there has been concern over a drop in productivity. You are tasked with analyzing the situation and determining the extent of the decline. Your job is to calculate the productivity for two time periods, find the percentage drop,  In 2018, your team assembled 50 devices in 10 hours.  In 2023, your team can only assemble 45 devices in 12 hours. Question: what is the percentage drop of productivity? 2018: 50/10 = 5/h 2023: 45/12 = 3,75/h (3,75-5)/5 = 1,25/5 = 25% 4 Purchase and Inventory 4.1 What is the purchase department doing A company's purchasing department is responsible for managing the entire process of procuring goods and services needed for daily operations and production. Goods and services?  Direct = all goods and services directly incorporated into the finished product, cfr. BOM (Bill of Material)  Indirect = all supporting goods and services E.g. Company cars E.g. Telecom subscriptions E.g. Investments in warehouses 19 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 4.2 Process Selecting & Identifying needs Order Follow up contracting 4.2.1 Identify needs This info arrives at the purchasing department in different ways, depending on the type of product or service  Based on an inventory trigger: if a product's inventory drops below a minimum stock level (min-max rule) > Strong automation possible using ERP  Based on demand forecasts (cf. MRP) > make the right purchases in time to prevent production planning problems  Based on a sales order > if a large deal is closed that requires expensive purchases to be made, one will only spring into action after confirmation  Based on management decisions “From now on we are going to outsource cleaning” “We need to renew our laptops, so are going to take inventory of who really needs which devices to save on this”... 4.2.2 Selecting and contracting Depending on the type of product or service Small inexpensive goods that are often re-ordered > Often smooth ordering through different suppliers, quick price comparison e.g. through the web shops An example of how this is addressed in ERP software for construction Example of a plumber Larger expensive goods purchased only sporadically or large long-term contracts for buying on a regular basis > in-depth comparison STEP 1: Request for Information (RFI). Listing requirements Longlisting (vendor rating) STEP 2: Request for Quotation (RFQ) = request for quotation RFI: longlist > RFQ: shortlist (3 to 5) Sometimes specifications. Important: comparability, ask clearly what you want STEP 3: Selection Compare offers received: Quantitative and Qualitativ Follow up additional questions, adjustments Negotiations 20 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 21 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 STEP 4: Signing the offer and/or drawing up the contract Everything is finalized: price, terms of delivery, penalty clauses, guarantee, other conditions,... 4.2.3 Order 2 options: 1 Single order = Purchase Order = PO 2 Commitment to placing multiple orders over a longer period of time = Call-off agreements > terms are fixed, if customer has need, order is placed at agreed terms > Ensures efÏcient ordering procedures without too much back-and-forth communication 4.2.4 Follow up  Delivery times respected?  Quantities correct?  Quality ok? Quality control (QC)  Certificates, correct documents present? ... To be legally covered and to ensure that the terms of the order are respected, compliance with all agreements is often covered by a separate contract: SERVICE LEVEL AGREEMENT (SLA) 4.3 Demo Purchasing and Inventory in Odoo 4.3.1 KPI’s Measures the reduction in procurement costs, including discounts, bulk purchasing, and negotiation outcomes. It often Cost savings reflects the ability to reduce expenses without compromising quality. Tracks the average time suppliers take to deliver goods from the Supplier Lead order date. Shorter lead times help ensure the availability of Time goods when needed and improve supply chain efÏciency. Monitors the percentage of orders delivered by suppliers on or On-Time Delivery before the agreed-upon date. This KPI reflects supplier reliability Rate and helps prevent production delays due to late deliveries. The percentage of invoices that are contested or disputed due to Invoice Dispute issues such as incorrect pricing, quantity discrepancies, or Rate incomplete documentation. Tracks the percentage of goods received from suppliers that do Supplier Defect not meet quality standards. A high defect rate can indicate Rate issues with supplier quality and can disrupt operations. It’s the average amount of time spent between the moment Purchase cycle when the requisition from another department is submitted and time the placement of the purchase order. 22 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 Cost savings "Thanks to tough negotiations and attentive invoice control, the procurement department saved up to 8% last year" (imagine you only buy and resell one single product and the quality hasn't changed) Procurement cost 2022: €1.320.000 Number of articles bought 2022: 8.696 Procurement cost 2023: €1.480.000 Number of articles bought 2023: 10.560 Procurement cost per article 2022 = €1.320.000/8.696 = 151,79 Procurement cost per article 2023 = €1.480.000/10.560 = 140,15 Cost savings = (140,15-151,79)/151,79 = - 0,077 = - 8% Supplier lead time "The purchase price at supplier Rexel might be higher, but the lead time is much shorter, so we prefer them above Cebeo " Last month: 5 orders were placed at Rexel with these delivery times: 2 days, 3 days, 1 day, 1 day, 2 days 7 orders were placed at Cebeo with these delivery times: 2 days, 3 days, 1 days, 3 days, 2 days, 2 days, 3 days Who has the best supplier lead time? Supplier lead time Rexel: (2+3+1+1+2)/5 = 1,8 days Supplier lead time Cebeo: (2+3+1+3+2+2+2+3)/7 = 2,6 days On-time delivery "The on-time delivery rate of our main supplier is 80%" On time delivery = Number of on-time delivery of supplier x 100 Total number of deliveries of supplier Total deliveries = 50 Very similar calculations On-time deliveries = 40 for:  Invoice Dispute Rate OTD = 40/50 = 80%  Supplier Defect Rate Purchase cycle time "The average purchase cycle time of supplier Femex is 13 days" Let's say a company we an order on October 1st, and the supplier delivers the materials on October 15th. Order Date: October 1st Date Received: October 15th Purchase Cycle Time = Oct. 15th – Oct. 1st = 14 days If you track this cycle time over the whole year, you can take an average Eg. 14, 18, 16, 15, 10, 9, 8 = (14+18+16+15+10+9+8)/7 = 12,86 23 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 4.3.2 The most important KPI’s of an inventory/warehouse manager Inventory Calculates how many times inventory is sold and replaced over a Turnover certain period. Inventory carrying cost, also known as holding costs or the cost Inventory of carrying inventory, is the the total value a company pays to Carrying Cost maintain inventory in storage. The costs include warehouse, insurance, rent, labor and any unsellable products. Backorder rate is a measurement of the number of orders a Backorder Rate company cannot fulfill when a customer places an order. It shows how well a company stocks in-demand products. Tracks the time from receiving goods to storing them in their Putaway Time designated location, assessing warehouse efÏciency. Inventory turnover "Our inventory turnover is 4" Inventory Turnover = Cost of Goods Sold (COGS) Average Inventory Cost of Goods Sold (COGS): The total cost of producing or purchasing the goods that were sold during a specific period = €500.000 Average Inventory = Beginning Inventory + Ending Inventory = 100.000 + 150.000 = 125.000 2 2 Inventory Turnover = 500.000/125.000 = 4 An inventory turnover of 4 means a company sells and replaces its stock +/- 4 times a year. A company wants to keep this as high as possible, because that means that time in inventory is limited and inventory costs money. Backorder rate "The backorder rate of our walking shoes is 5%" Backorder rate = Number of backorders x 100 Total number of orders  Backorders: The number of orders that couldn’t be fulfilled on time = 25  Total Orders: The total number of customer orders during the same period = 500 Backorder rate = 25 x 100 = 0,05 = 5% 500 24 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 5 Finance Accounting sounds boring… But why do companies do This? 1 INTERNAL REASONS To have a clear picture of correct numbers to make decisions: What’s the profit or loss? What revenue of each product did we generate? What’s our largest cost item? How much money is in the bank? When do we need to reinvest? 2 EXTERNAL REASONS Companies pay taxes (corporate tax, VAT, …) so it is important for governments to have a transparant overview of income and costs to get a fair calculation. Also maintain transparency to stakeholders like customers, suppliers, employees, investors, etc. 5.1 Financial statements = the end result of the accounting process  An ofÏcial document that companies must submit yearly. Strict deadlines and potential fines.  Should follow a specific format and is usually prepared by (external) accountants. 25 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814  Available online at the Belgian National Bank https://consult.cbso.nbb.be/ Main components of an annual report:  Balance Sheet  Profit & Loss Statement  Notes  Social Balance 5.1.1 Balance sheet Assets 26 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 What the company owns:  OfÏces  Warehouses  Fleet (cars,..)  Investments in other companies  Goodwill  Stock  Accounts receivable  Cash  Bank  … Liabilities How is it funded?  Initial investment of the founders  Profit that was earned before and reinvested in the company (Reserves)  Bank loans  Accounts payable  … 5.1.2 Profit and loss statement Revenu - Costs = Profit or loss 27 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 What to do with the profit Distribute as dividends to shareholders Add to equity to reinvest in the company How do we get the right numbers on the right location in the financial statements = purpose of accounting Before: Manual entry in ledgers, later summarized in the general ledger, which formed the basis of the balance sheet and income statement. A lot of manual work to book every transaction! Later software has helped to automate this but still a lot of manual input Nowadays: digital and in the cloud If you use an integrated system every transaction in the company (book invoice, confirm a delivery, register purchase, cash transaction, rental order, ….) is registered and in the backend also the appropriate accounting transaction will be done automatically on the right accounts. If this runs smoothly, the balance sheet and the profit and loss statements are always up-to-date The more registrations are done, the smarter the system becomes and the more accurate the accounting transactions will become > some tools already use Artificial Intelligence for this 28 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 5.1.3 Innovations in Accounting API Integrations  Link ERP with banking applications to track paid invoices in real-time  Pay your bills from the ERP through the API link with your bank application Payment providers  Online transactions are always handled with a third party provider OCR OCR = Optical Character Recognition = Software that recognizes certain data on a document = AI because the more invoices are uploaded to the software, the smarter it becomes and the more accurate 29 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 UBL standard Every invoice can be converted into a digital version (.xml format) that is universally recognized = UBL document UBL = Universal Business Language Peppol – obligation as from 2026 Read this: https://www.loyensloeff.com/insights/news--events/news/e-invoices-in-belgium--1st- january-2026-it-is-/ https://peppol.org/ What is Peppol? What is the difference between an e-invoice and an invoice in pdf format? For which transactions will e-invoicing become a requirement? 5.2 Demo accounting in Odoo 5.2.1 The most important KPI’s of a financial manager Working capital Working capital is the amount of liquid assets a company has available to cover its short-term liabilities, calculated as current assets minus current liabilities. Current and The current ratio measures a company's ability to pay off its Quick ratio short-term liabilities with its current assets, calculated by dividing current assets by current liabilities. The quick ratio, or acid-test ratio, assesses a company's ability to meet short-term liabilities using its most liquid assets, excluding inventory, and is calculated by dividing quick assets (current assets minus inventory) by current liabilities. Debt ratio A company's debt ratio can be calculated by dividing total debt 30 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 by total assets. Gross profit Gross profit margin is the profit remaining after subtracting the (margin) cost of goods sold (COGS) from revenue. Net profit Net profit margin is the profit that remains after subtracting total (margin) expenses from revenue. Return on equity Measures a company's profit as a percentage of the combined total worth of all ownership interests in the company. Return on capital Return on capital, in addition to using the value of ownership interests in a company, also includes the total value of debts owed by the company in the form of loans and bonds. Cash Flow Cash flow is the net amount of cash moving in and out of a business, representing its ability to generate liquid funds to meet expenses, investments, and debt obligations. EBITDA EBITDA, or Earnings Before Interest, Taxes, Depreciation, and Amortization, is a financial metric that shows a company’s operating performance by measuring its earnings before accounting for financing costs, tax impacts, and non-cash expenses like depreciation and amortization. Working capital The difference between a company’s current assets—like cash, accounts receivable/customers’ unpaid bills, and inventories of raw materials and finished goods— and its current liabilities, such as accounts payable and debts. It's a commonly used measurement to gauge the short-term financial health and efÏciency of an organization. So should be positive. The cash and bank account are €35.000 The accounts receivable are €16.300 The inventories are estimated at €26.500 The accounts payable are €12.780 The loans to be repayed soon are €11.000 What is the working capital? Current assets – current liabilities = (35.000 + 16.300 + 26.500) – (12.780 + 11.000) = 54.020 31 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 Current and quick ratio Current and quick ratio are the working capital but in a fraction Quick ratio is the current ratio without taking the inventories into account current assests Current ratio= current liabilities (current assests−inventories) Quick ratio= current liabilities The cash and bank account are €35.000 The accounts receivable are €16.300 The inventories are estimated at €26.500 The accounts payable are €12.780 The loans to be repayed soon are €11.000 (35.000+16.300+26.500) Current ratio= =3,27 (12.780+11.000) (35.000+16.300) Quick ratio= =2,16 (12.780+11.000) Debt ratio How much debt do we have compared to the total of our assets (in %)? total of debts 800.000 Debt ratio= ×100= × 100=67 % total of assests 1.200.000 Gross and net profit margin COGS = Cost of goods sold This amount includes the cost of the materials and labor directly used to create the good. It excludes indirect expenses, such as distribution costs and sales. Not included 32 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814  Administration ofÏce  Cost of Distribution & Sales & Marketing  Managerial salaries = overhead costs  Rent of ofÏces  … Gross profit Gross profit margin is the profit remaining after subtracting the (margin) cost of goods sold (COGS) from revenue. Net profit Net profit margin is the profit that remains after subtracting total (margin) expenses from revenue. The raw material cost is €42.000 The labor cost of manufacturing workers is €28.300 The depreciation of the machine is €12.500 The overhead cost is €25.000 The revenue is €160.000 Gross profit = 160.000 – (42.000 + 28.300 + 12.500) = 77.200 Gross profit margin = Gross profit/Revenux100 = 77.200/160.000x100 = 48,25% Net profit margin = 160.000 – (42.000 + 28.300 + 12.500 + 25.000) = 52.200 Net profit margin = Net profit/Revenux100 = 52.000/160.000 = 32,5% Return on equity and return on capital How well is the investment of money performing?  Compared to the equity the owners have invested  Compared to the total of capital that is invested into the company (= sum of equity and debts) Our profit is €40.000 profit 40.000 Return on equity = ×100= ×100=10 % equity 400.000 profit 40.000 Return on capital = × 100= ×100=3,3 % total liabilities 1.200.000 33 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 6 HR 6.1 Termen 6.1.1 Recruitment COMPANY APPLICANT 1 Write down Job Offer  1 Send your motivation letter + CV 2 Spread the word  2 Wait impatiently  3 Screen the applications and 3 Prepare well & make a good impression make a first selection  4 Job interviews: assessments, 4 Try to optimise your paycheck & group talks, simulation, …  conditions 5 Contract negotiation and hire 5 Start your new job! new employee Automate & digitize this with a tool like 34 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 6.1.2 Contractmanagement 6.1.3 Workflows 35 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 6.1.4 Asset management 6.1.5 Payroll 36 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 6.1.6 Calendar, absences and time tracking 6.1.7 Performance management 37 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 6.1.8 Employees and Organigram 6.2 Software demo HR management – OfÏcient 6.2.1 The most important KPI's of a HR manager Employee Measures the number or percentage of employees who leave an Turnover Rate organization over a specific period of time Time to Hire Calculates the average time taken to fill open positions. A lower time to hire can indicate efÏcient recruitment processes and stronger attraction strategies. Cost per Hire Measures the financial investment required to recruit and onboard a new employee, including advertising, recruiter fees, and onboarding costs. Absenteeism Measures the average number of days employees are absent, Rate which can indicate levels of job satisfaction, health, or engagement. Employee Captures employee satisfaction with their roles, work Satisfaction environment, and company culture. This KPI is commonly Score measured through regular surveys. Employee Tracks output per employee, which can provide insights into the Productivity efÏciency of both the recruitment and training processes. Employee Turnover Rate "The Employee Turnover rate in Smartcom is +/-19%" Total number of employees at the start of the year:1050 Number of employees hired during the year: 160 Number of employees left the company that year: 200 employees at start + employees at end 1.050+1.010 Average number of employees= = =1.030 2 2 38 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 Employee turnover rate=employees who ¿ = 200 =19,42 % ¿ averagenumber of employees 1.030 Time to hire + cost to hire "Our time to hire is 32 days, our cost to hire is €2.800" You have filled in 3 positions:  Position 1: took 45 days to find someone, costed €1.600 to an agency  Position 2: took 28 days to find someone, costed €2.100 own staff time  Position 3: took 23 days to find the good candidate, costed €800 to an agency There was a global advertisement cost for the three positions of €3.900 45+28+23 Average time ¿ hire= =32 days 3 1.600+ 2.100+800+3.900 Average cost ¿ hire= =€ 2.800 3 Employee productivity "Our employee productivity is €53 per hour of work" Imagine you produce €80.000 worth of goods in 1500 hours output Productivity= input 80.000 So this means the productivity is =€ 53 per hour of work 1.500 "Our employee productivity is €2.666 per employee a week" Suppose there are 30 employees that produced €80.000 of goods in one week 80.000 Employee productivity= =€ 2.666 per employee per week 30 39 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 Power BI – practical sessions Power BI application is not needed for the exam!  Microsoft Power BI: A business intelligence tool by Microsoft aimed at making data visualization and analysis more user-friendly.  Established Presence: Power BI has been a key player in the business intelligence market.  Component Evolution:  Power Pivot for Excel: Launched in 2010 as an early component.  Power BI Desktop: A more recent addition to the suite.  Continuous Updates: Features and functionalities are enhanced with monthly updates.  Integrated BI Suite: Combines various independent BI components into one cohesive software suite.  Beyond Visualization: Power BI is more than a visualization tool or a self-service analysis tool like Excel's PivotTable/PivotChart; it integrates multiple functionalities.  Cloud and Local Capability: Supports cloud-based and on-premises data analysis.  Extensive Data Sources: Continuously expanding support for a wide range of data sources.  ETL Process Support: Enables Extract, Transform, and Load (ETL) processes for data preparation.  High-Speed Engine: Performs calculations and analyses with a fast in-memory engine.  Advanced Visualizations: Offers diverse and customizable visualization options to uncover insights and tell compelling data stories. 1 Power BI vs Excel  Two Options: Users can choose between Power BI Desktop and Excel add-ins for business intelligence tasks.  Decision Factors: The choice depends on specific needs, such as advanced BI features (Power BI Desktop) or familiarity with Excel.  Practical Approach: A combination of Power BI Desktop and Excel add-ins is commonly used in practice to leverage the strengths of both tools.  Power BI Desktop:  Offers powerful, visually appealing visualizations.  Ideal for creating dashboards for presentations or management use.  Power BI Cloud/Service:  Centralizes all reports and dashboards in one location.  Facilitates easy sharing and provides end users with a single access point.  Excel:  Provides extensive analytical capabilities for in-depth analysis.  Allows end users to create and customize pivot tables based on their insights.  Key Difference:  Power BI: End users can view but not modify reports.  Excel: End users have greater flexibility to modify and customize their analyses. 2 Power BI components Power BI Desktop Power BI service  On your PC  In the cloud  Focus on developing the data model  Focus on sharing reports and 40 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 and designing reports & dashboards dashboards 41 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 3 Power BI Desktop: 3+1 workshops 42 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 4 Data-sources 4.1 Examples for Power Query 4.2 Classification  File-Based Sources: Data stored in files, commonly used for data analysis and reporting. Examples: Excel, CSV, XML, JSON.  Business Systems: Integrated applications that manage business processes and transactions. Examples: ERP (SAP, Dynamics AX, Business Central, etc.), CRM (Salesforce, Dynamics CRM, etc.).  APIs and Web Services: Interfaces enabling applications to communicate and exchange data with each other. Examples: RESTful APIs, OData services.  Relational Databases: Structured data organized in tables with rows and columns. Examples: SQL Server, Oracle, MySQL.  Non-Relational Databases (NoSQL): Flexible schemas for unstructured or semi- structured data. Examples: MongoDB, Cassandra.  Data Warehouses: Centralized repositories that consolidate data from various sources for analysis. Examples: Azure Synapse Analytics, Amazon Redshift.  Cloud Data Platforms: Scalable storage and data analytics services in the cloud. Examples: Azure Data Lake, Amazon S3. 43 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 4.3 Another data-source: open data  What?  Publicly available data that anyone can freely use, modify, and share.  Why?  Enhances understanding of internal data by linking it to broader trends and events.  Discovers new business opportunities or insights.  Examples  Exchange rates: www.exchangerateapi.io or www.ratesfx.com/rates  Weather data: www.openweathermap.org 4.4 On premises vs cloud On Premises (on Prem) Cloud IT infrastructure hosted on the physical IT services delivered over the internet, premises of an organisation hosted by external providers Examples: Local SQL Server, proprietary Example: Amazon Web Services, Microsoft data centers, local storage Azure, Google Cloud Platform Characteristics: Characteristics:  Higher initial costs for hardware and  Pay-as-you-go, often with lower initial maintenance costs  Full control over data and systems  Scalability and flexibility  Potentially limited scalability  Reliance on internet connectivity and external providers 4.5 Gateway  Purpose of a Gateway: Acts as a bridge between cloud services and on-premises data sources for secure data transfer.  Benefits:  Security: Keeps data secure within the corporate network without permanent cloud copies.  Real-Time Access: Allows near real-time retrieval of on- premises data for cloud applications like Power BI dashboards.  Data Refresh: Supports regular updates of cloud-based datasets from local sources.  Installation: Should be installed on a machine within the network, preferably a server. 5 Data Analysis Exploring Data Content: content, volume  Content: What types of data are included? Are they transactions, log records, customer information, etc.? Are they facts or dimensions? FACT or DIM?  FACT: the data you want to analyse  DIM: the data is shown “per” dimension. Contains extra info (e.g. customer info) 44 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814  Volume: How much data is there? Consider the number of rows, file sizes, or database sizes. Assessing Structure: columns, data types, relationships  Column Names: Are the column names consistent, descriptive, and clear?  Data Types: Are the data types appropriate for the values they contain (e.g. numeric, text, date/time)?  Relationships: If there are multiple tables or datasets, how are they related? Evaluating Data Quality: missing values, data types, relationships  Missing Values: Are there columns with many missing or null values?  Duplicates: Are there duplicate rows or values that should be removed or merged?  Consistency: Are values within a column consistent (e.g. no mixture of units like kilograms, meters, and counts)? Uniqueness and Variability: frequency, distinct values, unique values  Frequency: Which values occur most frequently? Are there rare values that may require attention?  Distinct Values: How many unique values are in a column after duplicates are removed? This is important for categorical variables.  Unique Values: How many values occur only once? Further Considerations: normality, outliers, correlation  Outliers: Are there values that fall far outside the normal range?  Correlation: Are there columns that are strongly related or correlated?  Normality: For statistical analyses, it may be important to know whether a variable follows a normal distribution. 5.1 Datatypes: The essentials  Number  Decimal number (e.g., 34.52) - Used for amounts of currency (EUR, GBP, USD, etc.)  Whole number (e.g., 4) - Used for quantities Only use "number" when it makes sense to perform calculations with the values (addition, division, etc.)  Date/Time  Date (e.g., 23/02/2023)  Time (e.g., 17:03)  Date/Time (e.g., 23/02/2023 17:03)  Text (e.g., INV024654, Bruges, etc.) Use "text" when it does not make sense to perform calculations with the values 5.2 Dataclean(s)ing  Identifying Errors: Searching for inconsistencies, discrepancies, and outliers  Data Transformation: Converting formats, units, or currencies  Handling Null-Values: Deciding whether to remove, fill, or ignore empty fields  Removing Duplicates: Searching for and eliminating duplicate data  Validation: Ensuring that data complies with established standards or rules 45 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 6 Power query and ETL 6.1 Power Query Power Query is a key component of Power BI Desktop for the ETL (Extract, Transform, Load) phase, especially in data transformation.  Data loaded into Power Query = referred to as queries.  Power Query allows you to structure and transform data, such as removing/adding columns or changing data types.  It supports the use of M-language, a formula language, to create queries.  Once queries are loaded into Power BI Desktop, they become tables accessible in the model, data, and report views.  These preparatory steps in Power Query only need to be performed once. 6.2 ETL: extract, transform and load ETL Principle:  Extract  Importing data files into Power BI Desktop  Transform  Applying necessary transformations to data files so that they are ready for use in Power BI  Load  Loading final data table into Power BI Desktop 46 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 6.2.1 Connect to a data-source: 6.2.2 Transform Data analysis  Power Query  quickly analyze data using 'Data Preview' feature in View tab.  Select options you want to visualize.  Column Quality  view amount of missing data.  Column Distribution  see statistical distribution within each column.  Column Profile  Allows to view summary statistics & more detailed frequency information of columns. Note: By default = based on top 1,000 rows. Clicking changes to cover entire dataset. 47 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 Transform: apply transformations data Some examples  Use the first row as field names or headers  Perform text transformations (TRIM, Capitalize Each Word, Replace Values,…)  Normalize a table (unpivot) or make a pivot column  Adding a prefix or a sufÏx  Adjust column titles  Modify data types  Duplicate a query and adjust the source file  Append queries (same amount of columns and column names needed) or merge queries  Organize the query menu  … Pivot or unpivot queries 48 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 Merge or append queries Merge Append Allows to merge data from multiple tables Allows to stack tables vertically, meaning (queries) that share a common column. adding rows from one table directly under another.  useful when integrating information from different sources into one table,  helpful for combining data that shares preserving original column structure/each same columns but represents different table side by side. periods, sources/categories. Advanced editor Use advanced editor to view overview of all steps.  Every step starts with “Source”/a “#”  changes made there/in navigation on right side of screen where you find query steps. Power Query M is the functional programming language used in Power Query.  Knowing M-language  necessary for working with Power Query, as it is designed to be user-friendly & generates M-code automatically in background.  Users can view & edit M-code in 'Advanced Editor'.  Having a passive understanding of M- language = helpful.  Reference: Power Query M formula language. 49 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 6.2.3 Load Load the final table into Power BI desktop  Load step  load queries needed to create Power BI report into Power BI.  Can "uncheck for load".  When  loaded into data model  appear in italics.  Once queries = loaded  refer them as tables. 7 DAX Data Analysis Expressions (DAX) is a calculation language in Power BI for creating calculations and performing data analysis.  DAX = used to create calculated columns, measures, & custom tables.  DAX functions = predefined formulas that perform calculations on specific values, known as arguments. 7.1 DAX-syntax The formula includes the following elements: 1 Name of calculated column/measure 2 Equals sign 3 DAX-function, SUM in example 4 Parentheses 5 Table name, in example = about table FACT_Sales 6 Column name, in example it = column “Revenue” Many DAX functions = like Excel functions, but DAX also includes unique functions.  Power BI Desktop provides formula suggestions as you type, including DAX functions & columns from existing tables.  Power BI indicates required input for each DAX function.  DAX functions often have multiple arguments, with mandatory & optional ones.  Optional arguments = typically enclosed in square brackets.  Reference: DAX functions documentation. 50 Downloaded by Emmanuella ([email protected])  lOMoARcPSD|12145814 7.2 DAX-operators DAX uses same mathematical & comparison operators as Excel. Category Symbol Usage Mathematical + Addition - Subtraction * Multiplication / Division Comparison = Equal to Not equal > Greater than >= Greater than or equal to < Less than