EightyTwenty+ guide
Cost of complexity starts with seeing where activity is disproportionate to value
Operational complexity is often hidden when management looks only at revenue. One transparent signal is Order Intensity: a customer’s share of orders divided by their share of revenue.
What Order Intensity means
An Order Intensity of 1.00× means Order Share and Revenue Share are proportional. Above 1.00× means a customer creates a larger share of orders than revenue; below 1.00× means the opposite.
What it does not mean
Order Intensity is not a cost-to-serve calculation. It is an activity signal that identifies where management may want to investigate order size, frequency, service pattern or process exceptions.
Use it with customer class and margin
The most useful question is which customer classes and individual relationships drive the pattern, and whether the commercial return justifies the activity.