Automating your business

Remember the promise that computers were going to release us from drudgery? It’s happening at last, in the form of automating crucial but not exactly thrilling business tasks. And, another promise, it’s going to get better!

In any business there are some jobs that are simply not interesting, but are essential. Order entry, invoice processing, and updating catalogues can be tedious and time-consuming, but remain essential to the function of any business.

So why not automate them? In most cases the software is already there, and numerous tasks that once fell to pen, paper, and a calculator, have been coded into software and mass marketed to business. What started with accounting and payroll has moved on into human resources, supply chain and logistics, and sales force and customer relationship management (CRM).

For most businesses, large and small, it would not be conceivable to operate without at least some of these software technologies in place to take the pain out of running the business.

For a simple example of software-based automation, think about a giftware company that operates a sales website. Obviously the website needs to be filled with products and offers. By linking the site to the company’s inventory and order management system, that information can now be published to the web in automatic real-time. Customers can see when a listed product is out of stock or on order, and the website operator has also saved the cost of having someone manually enter that information.

Automation in sales and customer management can mean that customer information can be captured into a single system (rather than the head and notepad of the client rep). So it is on call for anyone dealing with that customer, and is not lost when the sales rep leaves the company. By monitoring sales patterns across customers it is also possible to identify up-sell opportunities and have these automatically raised.

Cost & Complexity

According to the Michele Caminos, a New Zealand-based vice president of research at the technology analyst company Gartner, the cost of software-based automation for a smaller company is really no greater than that for a larger one. Both parties will still see the final bill determined by the cost and complexity of the applications they choose, and of course the number of workers using them.

In fact, Caminos says Gartner’s research shows that SMEs spend, on average, a higher percentage of their revenue on IT than larger organisations—approximately nine percent.

A key factor for determining the success of a software automation exercise is taking the time required to match the software’s capabilities to the business and its goals. “This can be time-consuming, and may even leave some SMEs feeling like they have had to ‘settle’ for the solution they did choose,” Caminos says. “More and more software vendors are offering a ‘mass-customised’ approach to their applications, which enables quick selection of feature requirements for that business so they can tailor it more to their organisation.”

Mass customisation helps, but Caminos says business must still heed the time required to implement and train employees in the new automated processes. “This will not go away and has to be done properly otherwise the full benefits of the application will take longer to realise,” she says.

For the Queensland-based air conditioning and refrigeration services company Jackson & Jackson, using Microsoft’s Dynamics software technology to automate businesses processes has been essential in supporting the company’s growth from its foundation in December 2006 to around 40 people today.

Manager Kirsty Dunsmore says from the beginning Jackson & Jackson’s founders were careful to select an application suite that would grow with the business. She had previously worked with another large system and was familiar with the benefits that such systems can deliver for managing a business, particularly as the company would be dealing with contracts valued upwards of $1 million.

She now rates the software as instrumental in helping the company grow from $3.5 million in revenue a year ago to $8.5 million now.

“The learning curve for our administration staff has been absolutely enormous, but they have coped with it, and because of the ease-of-use of the program they have been able to grow with it,” Dunsmore says.

Jackson & Jackson is now looking to use software to automate other areas of the business, such as stock and inventory management. “We carry huge inventory, and we are not managing that in the most efficient manner,” Dunsmore says. “It is still half manual, so our next push is to get up to speed in an automated sense from ordering of goods to receiving of goods and right through to the using of the goods.”

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Error Correction

According to Microsoft’s director of business systems, James Simpson, the first question a company should ask when selecting automation software is what broad business benefits will flow from automation. “We talk about the challenges of the business, and what are the things they are hoping to improve and how can we do that,” Simpson says.

One the first things that comes up is reduction of errors, relating most often to errors in shipping. Any loading dock that is moving dozens or hundreds of orders will know that just getting two or three of those wrong can destroy the margin on the next 20.

“Usually when you do the maths you can see that the software can help the customer be much more targeted and accurate in what gets put on a truck or what gets put in the post, so we can improve profitability for them very quickly and get a return on their investment in the software within a year,” he says.

The second area for error reduction is quoting, to ensure that companies are not bidding too high or too low for work. “If you give out a hundred quotes and one of them is 50 percent of what it should be, you’ve lost your margin on the next 20 or 30 quotes,” Simpson says. “But you can reduce the errors in the quotes by having the software apply some constraints and some checking around what goes in and out of quotes.”

Dunsmore agrees, partly because Jackson & Jackson works in a particularly cut-throat industry.

“When you’re running on a budget of $1 million you’ve got to keep track of it fairly closely and this program allows us to do that. The mark-ups in our industry are not high by any means and the competition is severe, particularly in a lot of government work. So we need to make sure we actually make the slim margins we are working to.

“We can’t wait till the end of the job to say, ‘oh dear, it’s not making money’. We need to know all the way along the line.”

Simpson adds that while the two areas he highlights might not seem that exciting or revolutionary, their automation can make huge differences to profitability, particularly for fast-growing businesses. Face it, if the work was interesting no one would want to automate it in the first place.

“The businesses that are mature and maybe growing by a few points per year tend to have operational discipline that takes care of these issues,” Simpson says. “Businesses that are growing at 20 to 40 percent a year are often a little bit haphazard and chaotic internally. As they rush to bring on new staff and product, the unsexy elements of administration don’t get a lot of attention.”

Unfortunately, for many companies the cost of investing in larger programs such as Dynamics prohibits them from the list of options, particularly early in a company’s life when working capital is tightest. And so many businesses adopt smaller application packages that can sometimes fail to provide the features and functions they need as they grow.

Many others will cobble together a business system out of multiple Excel spreadsheets. While this may solve the problem of needing a t
ool to store and manipulate information, it can require significant investments in time to input the data in the first place, and is rarely a cost-effective solution.

“In the beginning, they can create spreadsheets and other ‘good enough’ solutions,” Caminos says. “But at some point SMEs have the realisation that they have grown to a size where they need better automation. It is a natural level of progression and growth.”

In addition, external processes sometimes have to be automated to do business with customers and partners. Suppliers into the grocery retail industry, for example, will be familiar with the electronic ordering and invoicing systems used by major retailers, and a spreadsheet is rarely sufficient.

But, unfortunately, implementing technology can sometimes also mean putting a lot of time and effort into maintaining that technology as well.

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Software Services

Caminos says an option many businesses are beginning to use is ‘software-as-a-service’ applications (SaaS), also known as on-demand applications. These are software programs that are hosted by a service provider on the internet, and are accessed by the customer through a web browser.

The beauty of this model is that no upfront investment in IT is required to gain the benefits of automating a business process. All of the systems required to run the software reside with the software provider, and the application can be reached anywhere that you can access the internet. All that is required is a machine that is capable of running a web browser, and the software is normally paid for on a monthly subscription basis

“Companies exploiting growth markets often wish to focus on their real strengths rather than devoting management attention and scarce time and capital to building their own IT infrastructures,” Caminos says.

The leader in the SaaS field has been California-based Salesforce.com, which provides software for sales force automation and CRM. Recently Salesforce.com opened an online marketplace called the AppExchange, where other developers can post SaaS applications that are complementary to the software offered by Salesforce.com itself. In this way businesses can acquire an entire business automation suite without any upfront capital cost.

Several SaaS companies have also emerged from Australia, including Saasu, which makes software for accounting automation. Chief executive Peter Cooper says that because a SaaS tool is always running on its host’s systems, you can set it up to automatically perform tasks such as sending invoices at any hour.

“Two of our main value propositions are ‘automate’ and ‘connect’,” Cooper says. “And they are pretty well tied together, because if you are not connected there is a limit to the automation.”

Many SaaS applications also feature in-built connections to other SaaS tools, quickly creating a web of interconnected applications that can automatically send data among themselves.

For example, Cooper says that while a small franchise might use Saasu as its only tool, he has a larger client that also uses Salesforce.com for CRM, and then synchronises the details automatically between the two. He says reconciliation can also proceed more smoothly, because Saasu integrates with online banking systems.

“So the billing and ongoing post-sales account management get done in a consistent way without any manual synchronisation required,” Cooper says.

While the adoption of any form of IT automation inevitably leads to some level of support requirement, even this is increasingly becoming automated. As companies have become more and more reliant on their connections to the internet, there has been a corresponding rise in the number of service providers looking to automate the management of their client’s systems. The business broadband provider PacNet, for example, provides a service that sees it taking responsibility for the security of the connection of its client’s business to the internet.

While users of SaaS applications already see all of the hosting and maintenance of their applications taken care of by the provider, Caminos says that over time it is likely that SMEs will send more and more of their IT, such as email systems and databases, out to third party service providers.

“After all, the main reasons for investing in technology are to drive down costs and improve quality and use of data,” she says.

Putting CRM to Work 

A good customer relationship management (CRM) system will go a long way to help you make the most of sales leads and opportunities—seamlessly. Here are some tips to help you get the most from a CRM Solution

1. Work with CRM experts. If you want legal or accounting advice you hire a firm to seek advice or help with the ‘doing’, the same goes for implementing CRM. An experienced CRM consultancy firm can help you define the outcomes in a project, select the most suitable software solution and mitigate risk to ensure a successful project outcome.

2. Start small and build on module by module. Get up and running fast with the core functionality and build on this as needed with marketing, customer service and other modules.

3. Define your priorities. Define exactly what problems you seek to solve and your priorities

4. Work to your budget. Avoid budget blowouts and stick to your budget by looking at implementing the core modules and building from there.

5. Get a quick return on your investment. See a quick return on investment by getting up and running fast with the core modules and start seeing the benefits of CRM.

6. Make sure you know what’s included and what’s not. A good CRM provider should clearly define what your system can provide and what functions may be excluded, so there are no surprises.

7. Keep training simple for higher user adoption. Keep training simple so users only need to learn small amounts at a time by starting with the core modules. As more modules are added in time users can build on their knowledge.

8. Develop a new culture. To be successful be prepared to invest time and effort developing a new culture around your CRM solution.

Antony Dutton, managing director, Aaromba www.aaromba.com

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