Automating your business

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 tool 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.