Each week one of my clients and friends ask me to recommend technology and software which will help automate their life and business. I have my go to list and I thought I was a tech-wizard, until I met Dianne from Trendspire Canada Inc. She is a tech-queen! This weeks feature Friday post I bring to you her thoughts and advice about the true cost of delaying a tech or software. When I read this I was a shocked by the numbers. But I totally agree!
The Real Cost of Delaying Technology Decisions? Try >$8,500 a Month!
When processes are performed without the assistance of digital technology, it impacts the bottom line.
Repetitive Tasks: Consider each invoice… written, modified, distributed, matched, reconciled and selected for reporting. The time it takes to plan, schedule, supervise and evaluate tasks. Creating and distributing reports to obtain insights into successful and detrimental company activities. With digital processes, these tasks can be automated or the number of steps reduced.
Tasks Performed in Isolation: Email/Text is an ineffective method to inform people. When email is used for primary communication, there are legitimate ways to blame the system for not receiving a document. Operate without shared checklists and several people may attempt to do the same task. Supervisors may wonder if tasks have been done and have to check in, waiting to instruct those who are waiting.
Insufficient Follow-Up: How often do we hear, “I didn’t know about that [opportunity]” or “…forgot to add it to my calendar” or simply “didn’t have time”. Perhaps good reasons for not following up. Nevertheless, any time invested is now wasted, adding to the deficit.
Snowballing Security Risks: Attaching documents to email is not a secure method to transfer sensitive data. Information now easily saved and copied, contributes to proliferation and yet the biggest offender of time wasted is spent searching for misfiled documents and, ironically, re-sending them to fix the problem.
Missed Opportunities: Without accurate and insightful reporting, effective decisions cannot occur. It remains unclear on how to delight customers if there is no time or process to track their preferences. Missed meetings, missed announcements and not being available when a customer visits, may also lead to losing a deal or two.
Solution exploration: Company staff often suggest ‘just-in-time’ technology solutions as a stop gap measure. Traditional ‘on the desktop’, on the web (SaaS) or perhaps a custom developed and installed solution. Several trials and or quotes later, most companies are left confounded with choices between good and good.
Half-hearted technology attempts: After several attempts at immediate fixes and a few new logins later, integration challenges settle in. Companies find the new solutions are good at recording transactions but are not truly automating them.
Value of Lost Time/Productivity
For a company with a staff of 10 people…
Although these conditions typically occur, it’s not representative of the way all organizations operate.
$30K Year in Lost Time
The above time-deficit cases primarily impact financial, project/product management and sales departments. The time loss alone is at least (-)20% due to inefficiencies to perform the above tasks. If only managers are affected, a 20% of salary translates into about a $200 loss per week or over $10K a year for each of three managers. A time deficit/loss of $30,000 per year for small organizations is typical, often it’s more. Smaller companies may see little difference, since inefficiencies escalate due to the increased volume of work, eliminating savings of not having to inform others.
$72K Year in Lost Productivity
Money lost is just part of the problem. The 20% loss in time is compounded for each month delayed. You cannot get this time back. For every five months delay, one month is lost due to reduced capacity to seize new opportunities or where customers ‘could’ have had better service. The result is equivalent to losing over two months productivity a year, beyond the $30K already earmarked for completing time-deficit tasks.
$30K/year towards managers salaries for time-deficit tasks + $72K for 2.4 months/year in missed opportunities = $102K/year in Lost Time and Productivity
Sample cost to implement new technologies:
There’s a multitude of choices for effective digital solutions available to small companies (under 10 people). On a recent evaluation, licensing for mainstream, effective assistive technologies, based on a staff of 10 persons, can be found for a grand total of $8600 per year:
- Customer Relationship Management (CRM)/Activity Tracking: $4500 per year
- Scheduling/Appointment Setting: $300 year
- Invoicing/Expenses/Inventory: $400 year
- Client Portals: $1200 year
- Virtual Meeting Support: $2200 year
Now the company budget may have a new line item for technology. However, it represents 9% of the pre-technology total paid for lost productivity on the salaries line and for lost opportunities on the income line.
By providing effective digital resources, staff can work to their [full] capacity, that is, achieve their status quo.
And there’s another benefit. The savings are even greater when staff is empowered using appropriate digital tools. People may begin to really enjoy their jobs, spotting new opportunities as they occur, and fitting them into their new daily routines.
On the other hand, there’s a cost to implement new technology. Not all digital strategies should be implemented at the same time. With the help of a digital project manager, technologies can be introduced slowly and layered with support systems. For what it’s worth, the digital project manager does not have to be on staff. They can be part-time and contracted.
Consider each month of delay is costing $8500/month in lost opportunities and low-level production. A short-term budget of $5000 per month paid towards technology adoption results in a proactive savings of $3500 per month. Once best technologies are in place, look forward to a Return on Investment of about $93K/year, going towards plugging the $102K leak.
Given the abundance of affordable digital technology choices, the decision to jump on board is compelling. To delay the decision is costly. Leaders with the foresight to begin the process early will see benefits with more time, seized opportunities, happier employees, and higher bottom-lines!