Businesses with better things to do rather than deal with the tedious elements of administration will find using software-based automation could save a lot of time and money. Investing in this form of technology will drive down costs and improve quality and use of data. More importantly, software-based automation could make a huge difference in profitability for fast-growing businesses.
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.
How Complex and Costly is it?
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.”
The Benefits of Automation
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.”