A while back, I wrote posts pertaining to how we expect operations to accurately predict when sold (but not yet installed) orders (which we call pipeline) will get installed. Prior to that, I covered how our account execs are expected to accurately predict how much revenue they will sell. The past week of posts pertained to disconnects.
Like sales and installs, we develop processes around forecasting disconnects. At Zayo, the disconnect forecasting process is in its infancy, though I suspect it is still more advanced than many other telecom companies.
It is helpful to break disconnects into three categories:
- Disconnects that might happen
- Disconnect orders that have been received but the disconnect itself has not yet occured
- Disconnects that have already occurred
A solid-as-a-rock disconnect process is one that enables management to focus on Category 1 situaitons. If you have early warning of where you might be vulnerable, that probably means that your company is taking steps to avoid the disconnect.
Category 2 is important as well. Often, customers will send in disconnect orders prior to their contract expiring. Or, perhaps, there are ramifications, such as early termination penalities, associated with certain disconnects. A tight process flags these orders on the front end and ensures that the company is not short-changed in the process. As importantly, this stage sometimes provides the opportunity to make one last ditch effort to save the opportunity.
It is almost by definition that Category 3 means it is too late to save the order. However, Category 3 is important for forecasting cash flows–which BearOnBusiness.com readers know is one of my fundamental management principles. Moreover, accurate and timely reporting on Category 3 helps improve customer retention processes.
We have a long way to go at Zayo before our processes will be what I want them to be. I’d like to see us using Salesforce.com as a tool for flagging potential disconnects in the same way we highlight potential sales. I’d like to see verification that we have spent weeks trying to avoid each and every disconnect before it hit our system. I’d like to witness the creativity and persistence of our employees as they turn churn opportunities into new long term contracts.
We will get there, but it will take some time.
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