Continuous Improvement of TVO

Simply saying, presuming the sales labor portion ratio against sales amount is 10% (a bit too high but just as an example), the sales volume should be 300,000 RMB per sales rep per month, or 3.6 million RMB per sales rep per year, i.e. the company total drag sales in a year is 300 reps x 3.6 million (= 1.08 billion RMB). Therefore, the lost sales opportunity in 3 hours due to the bad sales IT environment in such a company with 300 sales reps should be equivalent to 2,160,000 RMB (1,080,000,000 / 1,500 x 3). Is this big enough for you?

The above is just an calculation in paper and not detailed enough, e.g. how to take the unproductive hour of traveling to customers into calculation; however, even the result is just a half, the saving or productivity improvement of over 1 million RMB per year cannot be ignored. This is the value of our Managed Service.

Well, when you apply a budget, request an investment to new application development, or selecting your IT service provider, who makes the decision based on more precise calculation of TVO like an example above? It is all the time a question whether your CEO, CFO, and other board members intensively review your budget based on true value of IT versus investment all the time?

The real value of Gamutsoft Managed Service is a feedback to our customer’s IT strategy and contribution to the IT value improvement; however, it requires a true business partnership with our customer as well. To proactively remove any process redundancies or wastes in IT service operations and support services requires open discussions and full collaboration of our customer BU’s and IT department.

Of course the benefit of Managed Service is not only in TVO and TCO concept, but many more. Not falling into a panic after facing to the financial crisis, but to make continuous effort for “Kaizen*” is essential. For doing that, the “Mieruka*” of IT performance and operation services quality is a key in addition to streamlining the processes.

Contrary to the body shopping based service contract, I would like to talk about other benefit of Managed Service agreement in the next issue of CIO express.

Note(*): Not only “Tsunami”, but a Japanese word “Kaizen（改善）” became an industry standard English terminology because TOYOTA, Panasonic and many others use the word even in the US. “Mieruka (可視化)” is a TOYOTA terminology that means “visualization”. If you are interested in about those words and the actual practices, please check “google.com.cn”. You may easily find many Chinese version explanations.