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B U S I NE S S O PE R A T I O N S Performance and Profit Key performance indicators can provide prompt feedback and serve as signposts to success, experts said By Stephen Bennett T oday's fuel oil dealers, beset by competing energy providers and subject to increasing regulation, might be feeling a bit of business performance anxiety, but two consultants say they have developed technology systems designed to help. Angus Performance Advisors, Ft. Lauderdale, Fla., and Hedge Solutions Inc., Manchester, N.H., both offer systems that use key performance indicators (KPIs) to monitor day-to-day business results so that dealers can promptly make needed operational adjustments to maintain margins and profitability. Hedge Solutions Inc., has a margin tracking software that its fuel oil dealer clients can access on the Web and use to follow a certain key performance indicator – margins – on a daily basis, said Richard Larkin, president of the company. "When the market fluctuates, so do their margins," Larkin said of fuel oil dealers, adding that dealers should "absolutely track their margins everyday – and then set a target. "Because the season is 120 days long," Larkin said, "they should be day counting – how many days they've been above their target, how many they've spent below it." He added, "For every day you miss your target margin in January, you need four days in April to make up for it because of the fact that the Richard Larkin volume is different. You don't want to wake up at the end of a month and the accountant is telling you you missed your margin. So, best to keep an eye on it from day one." It's possible, Larkin said, "to use market volatility to your advantage, if you're proactive and you are monitoring." A common practice among fuel oil dealers is to look at last month's profit and loss statement to see how the company performed, said Bob Levins, managing director of Angus Performance Advisors. That's too late, Levins said. Brite, primarily a Web-based system marketed by Angus Advisors, also is designed to help fuel oil dealers focus on key performance indicators on a daily basis and, if they are falling short, make "course corrections" immediately to hit revenue goals, preserve margins and keep the business profitable, Levins said. Fuel oil dealers pay a one-time implementation fee, plus a monthly fee, to use the software online. Users are not asked to make a term commitment, Levins said, meaning they can stop using the system at any time. Dealers who register to use the Brite system are issued a "black 20 August 2013 | FUEL OIL NEWS | www.fueloilnews.com box" - a hardware device, encrypted for security, that is installed to read the fuel oil dealer's back office operational systems – accounts receivable, delivery, service and sales data. The device sends that information to a secure website where it can be processed into reports generated by the Brite software. Angus Performance Advisors runs iniBob Levins tial checks with the fuel oil dealer to ensure that the data being provided are accurate. Then the dealer's personnel, issued secure access to the website, can begin tracking day-to-day results and viewing reports designed to highlight key performance indicators and help them manage the business, Levins said. Currently, the Brite system interfaces with back-office systems marketed by: Blue Cow Software, Lynnfield, Mass.; Automated Wireless Environments (AWE), Lake Hopatcong, N.J.; and ADD Systems, Flanders, N.J. Interfaces with other systems are being developed, with plans, ultimately, for interfaces with about a dozen back-office systems. "Metrics have always been important and always will be," Levins said. The use of key performance indicators supports daily decisionmaking and helps business owners nip problems in the bud. Specifically, margins can be worked day-to-day to protect the health of a business. "One of the most difficult things in business today is that the executive sits behind a desk and comes up with these budgets, but they fail to