I’d rather spend twice as much money doing nothing rather than solving the problem! I know, I know – When would you ever hear that? Unfortunately, I hear it all the time. You’re probably thinking, “Why would anyone want to spend more money doing nothing?” The truth is nobody wants to spend more, they just do. So what are we talking about here? I’m talking about businesses owners. Some of them see the big picture, and some don’t. Some just don’t understand the real costs in doing business, just the costs that are clear and present on the surface. Let me share with you some insight into what I’m talking about.
As a software and technology consultancy, it is the responsibility of our company to find problems and recommend solutions to increase profits. While assessing a client, which we will refer to as client X, our team saw several business processes that were inefficient and time consuming.
For instance, if a project (Client X Project) needed to be started, its folders, files and associated assets were manually created and compiled onto a physical hard drive on-location at the office. Team members and anyone who needed to edit the files, would log into the hard drive and make appropriate edits. After each employee, the next person in the process will receive an email to make their changes. Then, if an external third party had to work on the same files, the last person in the process would compile all of the work onto a zip folder and email it to the third party.
You kind of get an idea where I’m going with this. I’ve given you the bridged version. Each step has far more complicated steps.
One area of complication that is most important involved the merging of several points of data into one data bank. Each bucket of data had to be compared with other buckets of data to check and remove duplicates. Then, all of the data in the final bucket had to be filtered to meet specific requirements for the data to be approved. If you understand databases and data, you may think that this should have been easy. You would be right, but each bucket of data wasn’t a database, but an excel spreadsheet. Yes, you read that right! An Excel spreadsheet that had to be manually checked with other Excel spreadsheets.
The complete project required the use of three internal staff members. The time between each step in the process was hours, not minutes or seconds. All in all, we assessed tens of thousands of dollars in labor costs over a 1-year period. Additionally, due to the amount of time taken per project, we assessed thousands of dollars in lost revenues for projects that the client couldn’t perform due to time. With the amount of projects the client receives per month, we estimated costs exceeding $100,000.
We presented a proposal that we made. The total amount to automate and reduce the processes to minimal steps was around $50,000. Yes, $50,000 today to reduce $100,000 in costs netting the client $50,000 in cost reduction year one, and $100,000 in the subsequent years.
When presented with this proposal, the CEO focused primarily on the upfront, direct cost of architecting and developing the solution. “I can’t spend $50,000 on this!” says the CEO, “There’s no budget!” I replied, “That’s a common response, but you know you’re already paying double that per year, right?” The CEO looked at me puzzled. I showed him the assessment we had compiled, which included real cost and opportunity costs. I finished my presentation with, “So, what you are saying is you’d rather pay $100,000 per year in costs than $50,000 for the same results?” Need I go further?
It’s a simple numbers game. We play it because we are all about the numbers. We’re engineers and mathematicians. We spend our lives working numbers to create algorithms that make technology work to our advantage as well as the advantage of our clients. If you trust us to look at your problems, we will find solutions. It’s to your benefit and your business advantage to have a company like ours look into your technology because we will find a way to automate, simplify and save you money.