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WayPoint Analytics: A Go-to Solution to Maximize Profitability
Randy MacLean, PresidentWhile working as a sales professional early in his career, MacLean always sought answers for a few questions such as ‘how well was he performing’ and ‘what was happening in the industry?’ “I was always apprehensive about showing my numbers to my peers wondering if they were probably smarter than I was and were doing a better job than me,” reminisces MacLean. Since he was always curious about numbers, he thought of finding the answers to his questions by analyzing the targets achieved by him. And to his surprise, he was the top performer in the team. Such an approach didn’t just help MacLean be confident about his endeavors but also became the underlying concept for his dream venture—WayPoint Analytics—a ten-year-old company that helps analyze an organization’s profitability taking various factors such as operational efficiencies into consideration.
Measuring Profitability with a Cost Analysis System
According to MacLean, most distributors and manufacturers lose money on more than 60 percent of the operations conducted by them, and as an outcome, profitability is limited to the remaining 30-35 percent of their activities. “Every business can make more money than it presently makes; they need to figure out the ways of not involving in activities that make them lose money and focus on the ones that are profitable,” believes MacLean.
The answer to improving the performance of any business lies in optimizing the cash flows and profits with detailed cost analysis. WayPoint adopts a similar approach and gives organizations control over their business, empowering them to find ways to be more profitable. It makes maximum profit performance possible by analyzing a company’s costs in the financial statements and their invoice data through its cost analysis system—WayPoint Analytics.
WayPoint gathers all the information related to an organization’s expenses and provides comprehensive costing information depicting a real curve. The company’s cost analysis system helps organizations analyze and increase their profit margin until they exhaust all the profit-making sales. For instance, the profit margin in a $20M company is more than double the industry average, but it loses most of it on dysfunctional business.
The secret to getting 20 to 25 percent profit rates lies in managing the real curve by analyzing the business, which many companies fail to do.
WayPoint Analytics carries out a complete profit and loss (P&L) analysis for every customer, vendor, product, sales territory, and invoice a company has. This helps businesses to identify the areas where they have made or lost money. The WayPoint solution analyzes their operational costs and profits and thereby assists the clients in making informed decisions. The solution features an executive dashboard that displays a company’s operating cash, and works differently as compared to the business intelligence (BI) tools. While a BI system generates reports based on the information the customers already have in their systems, the WayPoint platform develops invoice-level cost and profit information that greatly expands what can be reported. It shows reports based on data that does not exist in a company’s system, so is unavailable to BI systems. Many companies use both BI systems and WayPoint to have a clear analysis report of their businesses. Every company has big data in its own information systems; if they can identify it, they can be more profitable and successful. “The kind of analytics that we provide with WayPoint does not exist in other Enterprise Resource Planning (ERP) systems, and that is the reason companies use our software to add agility to their systems,” claims MacLean.
Our platform takes information from the client’s system, carries out the cost and profit analysis, and gives them a powerful tool to study the analysis
"The trick to being successful is to start getting good customers and give up the bad ones to generate profit"
The company offers WayPoint as a subscription-based service in the cloud, which can be set up within 4-8 weeks. It does not involve any long-term contracts, allowing the customers to use it as per their requirements on a monthly subscription basis.
Trading Customers
The most profitable companies have the lion’s share of profitable and efficient accounts in the industry, market, or geography they cater to. The trick to being successful is to start getting good customers and giving up the bad ones to generate profit. This helps to increase the profitability of organizations without negatively affecting their sales. Every firm needs to analyze its accounts as a mechanism to find ways to make more money as that is something they have control over. Therefore, they should analyze the customer relationships, make improvements to those relationships, and accordingly trade customers with other companies to obtain profitable accounts.
While businesses can differentiate between good, bad, or average accounts, they do not have an appropriate way of measuring it, as their ERP systems do not provide the right analytics to do so. The WayPoint system, on the other hand, allows businesses to make the most of their ERP systems and the information they have. “Our platform takes information from the client’s system, carries out the cost and profit analysis, and gives them a powerful tool to study the analysis.
Therefore, they can find out the potential drivers of cost in their business and can start adding value to it,” explains MacLean.
Consistent Customer Engagements for Bilateral Profitability
WayPoint Analytics shares a unique relationship with its customers, unlike traditional solution providers that do not interact with the customers after selling and installing the software. Such companies reach out to their customers only when there are requirements for upgrades. On the other hand, WayPoint Analytics adopts a collaborative approach and educates the customers on pricing and profitability alongside giving them training that helps in strategically operating their businesses. WayPoint Analytics also provides analytical and profitability consulting as part of its service. “We perform cost and profit analysis with the clients and let them know what we would do if we have the privilege to run their companies,” says MacLean.
To help its clients and their teams to identify the challenges in the market, WayPoint Analytics has built the world’s largest library of management best practices videos, currently comprising more than 800 videos. These videos outline strategies and tactics for improving profits in nearly every aspect of a distribution or manufacturing business— profit-based sales compensation, inventory management, and warehouse organization. These videos also include the activities that businesses can perform to develop better and improved relationships with their customers.
With several such initiatives directed at ensuring its clients’ profitability, WayPoint Analytics has created strong business relationships with a multitude of customers, and its association with a Midwest-based company serves as a testimony to this. When the recession hit the U.S. in 2008, the firm was drastically affected due to the collapse of the market economy. It witnessed a tremendous downfall in revenue and profitability, and approached WayPoint Analytics to obtain a better understanding of profitability and get out of the crisis. Using deep and detailed cost and profit analytics, WayPoint not only improved their overall efficiency to get customers on board but also enabled them to adopt a strategic approach while dealing with the customers. “This allowed the client to offer price benefits to their customers and helped them understand the right margin for every account based on the cost structure,” mentions MacLean. Today, the client is one of the most profitable businesses in the Midwest and is rapidly expanding locally and in other geographies through acquisitions.
In the near future, WayPoint Analytics envisions expanding beyond the English-speaking market, and it has recently started investing in non-English speaking markets, making its analytics solution accessible to other parts of the world. The company has also made the system available in most of the western languages including English, French, and Spanish. “We have built the system in such a way that we can load appropriate language files for Hindi, Farsi, Hebrew, or nearly any other language, and this will turn out to be a great benefit for our clients,” says MacLean. With these capabilities and a vision to make it’s clients’ businesses profitable, the outlook for WayPoint’s second decade of service to its clients definitely looks bright.
October 15, 2018
