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Software editors: the analytical axes of effective management

By Sachot Jean-Baptiste, 12:35 PM on September 13, 2019

Software editors : the analytical axes

Are you floundering in your analytical monitoring? Do you feel that your data is not reliable enough? Perhaps you lack the necessary analytical skills. Maybe you were too presumptuous in the beginning, forcing your employees to get lost in endless amounts of data. Now your challenge is to find the right balance. And for that, you don't have to be a tightrope walker! Here are the most relevant analytical axes for effective management.

The 3 essential axes of analysis you need

To ensure effective strategic monitoring of your company, you must focus on the right analytical axes. There is no need to accumulate them: you risk complicating your management system. Focusing on 3 analytical axes is more than enough... as long as you choose the right ones!

Analysis axis 1 - The nature of the activity

You may already know this but we can never repeat it enough, the first essential axis to analyse is none other than the different trades practiced by a publisher:

  • the license,
  • maintenance,
  • deployment,
  • SaaS,
  • or even specific development.

Each activity requires a very different business model. It is therefore important to analyse the income and expenses, from subcontracting to labour, that each of them represents. Comparing these figures will allow you to know whether you are profitable - or not - for each of the activities you perform.

No software publisher can do without this axis of analysis, which is crucial for strategic monitoring. This is all the more true if you use external integrators.

Analysis axis 2 - The product

In the jungle of software publishers, many are multi-product companies: historical products still marketed, updated and more modern products, products acquired with external growth...

Whatever your situation, you have a second essential axis for the good monitoring of your company: the product! Do you know the profitability of each product marketed? Accurately analyse all the revenues and costs related to the activities carried out for each product: licenses, maintenance, deployment services, specific developments, etc. This will help you arbitrate and refocus on the product(s) that have a real impact on your bottom line.

If you have a very large number of products and sell, for example, 6 products to a single customer, the operation will be complex. In this case, go up one level and choose, as an analytical axis, a product line. In this way, users will maintain a product vision without getting lost in multiple axes.

Before embarking on other levels of granularity, be careful: for example, considering putting this axis at the version or module level of each product is far too complex.

Analysis axis n°3 - The organization of your company

The third most used axis by software publishers is related to the organization of the activity. Is your company vertically divided? Do you work with agencies or business units? There you have found a new relevant analytical axis.

Imagine: you work with various business-units - sales representatives, consultants, etc. One of them sells your product, another one takes care of the deployment. Here you are in the big game of intra-company invoicing: what are the costs generated by the commercial business unit? What about the ones generated by the technical business unit? And what services does business-unit A re-invoice to business-unit B? Whether by business unit, agency, SBU or any other means, a vertical company organization is often hierarchical: start at the lowest level and work your way up to the first level to conduct an effective analysis.

The effective analytical monitoring of your company depends on these three axes. A geographical analysis axis may also be relevant if it is a key element for you. In any case, do not neglect these 3 fundamental analytical axes.

Adapt your analytical axes to your needs

Of course, these four strong analytical axes do not form an exhaustive list. Other viewpoints which appear weaker may just be as relevant if they meet a real need. Ask yourself the right questions: on which axes do you want to break down your income statement? How about your profitability, your income, your expenses? Depending on you answers, other areas of analysis may be considered. For example:

  • An axis of analysis linked to the customer. An accounting software publisher may need to examine all their projects and activities according to each type of customers, and wish to compare the energy sector with that of retail.
  • An analysis axis linked to the internal organization, in order to ensure monitoring of overhead costs. In the context of an innovation tax credit, setting up a dedicated analytical axis may be particularly relevant: it will help you back it up.

Finally, the essential thing is not to miss the essentials. This means knowing how to find the right balance between a reading grid that is too light, which will reduce your overall visibility, and a system that is too complex and time-consuming, which will impact the reliability of the data.

To set up an effective analytical management, stay realistic about your goals. It is generally considered that an excellent balance is achieved with four well-defined - and well-informed - analytical axes. Don't be too greedy: choose the most relevant axes and put 100% of your effort into working on them with reliable data.

 

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