What’s a sale? So simple a question it shouldn’t require asking. When you do, though, a familiar pattern emerges: things have different meanings for different purposes, to different people, and at different times. That’s fine, but most peoples’ brains aren’t set up to hold multiple meanings in the forefront of consciousness all at once. So you have to simplify.
At one company, sales were defined by GAAP for accounting, by paperwork turned in for commission purposes, by the site general manager’s personal count for month-end countdown purposes, and, for month-end internal “official” reports, by a multi-tiered effective-dated manual compilation so complicated we won’t try to describe it here. Now try to do real-time reporting on that. Which one to use?
The answer, of course, was to pick one and begin to disregard the others. In this particular case, we picked transaction-system counters: a sale is when it’s recorded in the transaction system, regardless of effective date; a cancellation is when the cancel is received from the customer, regardless of effective date. We disregarded effective dates — e.g. customer quits today, but the quit isn’t effective until month end — because what matters is the customer’s decision, not the date that decision takes effect. You want to know about the quit, or the join, immediately, so you can act. And so you’re never surprised. Two benefits happened immediately:
- We were able to bring up real-time dashboards the next day, because we finally had a system-based definition that mirrored real-world items in real time.
- We sped up everything. Once people knew that the numbers only counted when they were in the system, guess what happened to paperwork. It got in the system faster.
With systems, often a simple definition is better than a perfect definition.