Technology can help us through the tough times

It’s true that America and Europe will have problems for many years, with bad debt sitting heavily on the major financial institutions balance sheets. We know this is having an effect on the Australian economy and will do for some time. So tough times yes, but Armageddon no!

Technology has many of the answers to improving and helping organisations in difficult economic times and many savvy organisations I talk to are already taking steps to improve their business. The following are just five key areas of software technology you can focus on to improve our chances of survival.

1. Look after our customers and prospects

In tough times you need to ensure that you are delivering exceptional service and safeguarding the loyalty of your customers without increasing cost pressures. If we don’t look after them someone else will!

Selling more to existing customers may be the first priority during a downturn, but the important task of acquiring new customers cannot be overlooked. Without growth in customer numbers, any business runs the risk of exhausting its revenue base over the medium term. However, selling to new prospects is generally regarded as being five to ten times more costly than selling to an existing customer, so improving sales and marketing efficiency will be vital for growing your customer numbers during the downturn.

Solution – Invest time, effort and money in a Customer Relationship Management (CRM) solution.

2. Look after your cash

Cash is king during an economic down turn so we need to look after our money. Careful cash flow planning, in addition to reducing our inventory levels, can all help us maintain a healthy bank balance.

Reducing inventory can be a great way to instantly increase the money in your bank however we need to be able to monitor this efficiently to ensure that this does not hold up delivery or cause problems if we are a manufacturer in our production process. Many businesses struggle to make accurate inventory forecasts, often resulting in excess inventory or running out of goods.

Solution – Ensure you have a proper inventory solution in place to ensure you are holding the correct levels of inventory to meet demand. The money is better in the bank than sitting in the warehouse!

3. Measure daily what the company is doing

I am often astonished by organisations I meet that don’t measure activity or have performance management in place.

How can you run a successful business or even increase your success if you don’t understand in detail what’s working and what’s not.

Solution – Business Intelligence will provide the real-time information you require daily, at the press of a button. Real-time data is critical. Working with historical data can make you too late to react. Key KPIs should be able to provide you with an instant picture of the health of the business.

4. Human Capital

Human Resources are an essential part of the business transformation process. In today’s increasingly demanding world the number-one challenge for all executive management teams is managing, retaining and growing talent. Moreover – doing more with less.

Like your customers, you need to look after your staff or someone else will, and in given the skill shortage in Australia this is a major factor for every business.

Solution – Effort and time is required to implement a proper payroll and Human Resources Management (HRM) solution to monitor your most valuable asset, your staff.

5. Controlling our purchasing

Keeping a firm grasp on your purchasing procedures is essential. Is purchasing centralised? Are there written purchasing policies and controls? Who makes a purchasing decision and when?

And what about your suppliers? Do you negotiate properly? Are unscrupulous suppliers double invoicing you for the same work (we would all like to think the people we deal with are honest!) In most companies a lot of money gets wasted in purchasing during the good times. You need to gain control of your procurement cycle.

Solution – Implement a procurement solution. By tracking your commitments to suppliers as they are made, you can accurately track your cash flow requirements and reduce the potential for disputes as supplier invoices are received. Prices quoted at the time of ordering can be compared with the supplier invoice and quantities received can be checked against the original order.

Actual plus your committed costs versus your budget gives you total control and also provides you with total visibility of your cost pipeline!

So there you have it.

Technology can be your constant during the good times and keep you afloat during the harder times. In a protracted downturn there will inevitably be casualties. The amount of available business shrinks and the weaker competitors get squeezed until they have to throw in the towel.

This creates hardship for some and opportunity for others. Now is the time to think about areas of your business that could be strengthened through the implementation of the right software solution.

Information is power and information at your fingertips is powerful.

Scott Graham is the Director of Greentree partner, Kinetic Information Systems.

Add Comment