How many times have you heard this?
When considering automation and measuring the return on investment, all too often senior management jump to the conclusion of “how many heads does this save me” before doing the analysis and resulting math.
Over many years of delivering automation services, I believe it is only the very small majority of projects that actually materialise in removing heads from the business.
Real life examples of automation in business documents (otherwise known as ecommerce) in both Accounts Payable and Account Receivable, generally helps to alleviate the pressure already inherent in the business and allows the business to grow without the need to add new resources i.e. doing more with the same, not doing more with less.
Successful business expansion, makes the problem worse
However as business expands and becomes more successful, the need to alleviate the pressure is so high. But what if you do not want to continue to add heads. The result is that internal processes can become compromised when pressure builds, which in turn can increase the need to automate.
Purchasing: how do you ensure what you are buying is at the correct price, authorised in the correct manner, received appropriately and invoiced to you correctly?
Sales: how do you sell your product at the correct price, by receiving orders with the correct order codes and issuing invoices correctly to ensure payment is possible at the first time?
Changing the game
To invest in automation, seniors will look to cut costs and quickly and expect this to be in the form of reduced headcount. But the managers in these areas look to reallocate resources and or redistribute job functions, to be able to better serve the company in a more efficient manner. This can have significant benefits and help to reduce costs or to increase sales. Automation can enhance processes and create a paperless and touchless office. Some examples of the questions that automation can answer are:
Purchasing – can you be sure that you are paying the right price for what you are purchasing? Are you paying on Invoice matched to Purchase Order, rather than ensuring the Purchase Order was issued at the right price, by the right person and authorised according to policy!
Sales – Is your customer ordering at the agreed contracted price? Do you have the time and process in place to check, or do you just process customer orders. If the orders were automated, that checks the contracted price before entered into your system, would you be able to tele-sale or upsell?
Without the facts, these are difficult items to discuss with senior management, but by analysing these areas, this can significantly change the ROI calculation from cutting staff to increasing sales and profitability. Which all levels of management will want to achieve.
Are you ready?
Automation is already here and is being driven by legislation in other EU countries and will become effective in the NHS in 2016. This is expected to be adopted by local government later in 2016. Make sure you are able to comply by evaluating the benefits to your business in effective ROI calculations.
Richard D’Cruze has over 25 years’ experience in business change management, having led many projects in process automation and ecommerce. Richard is currently Managing Director for Pagero UK Ltd (based in Brighton, UK) a successful ecommerce service provider that connects ERP systems (e.g. financial, order, purchasing systems) digitally with each other. Pagero’s e-order and e-invoice services help businesses to streamline operations throughout the entire order-to-pay process and are delivered in the cloud via our network Pagero Online. The services are independent of ERP system, industry and transaction volume and suit all types of businesses.