Cost savings in the cloud

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Cost savings in the cloud

By Sue Hirst

An abiding facing business owners is the management of costs – especially labour. Labour efficiency is a vital necessity for some to stay in business. Anything you can do to help staff be more efficient, will have a big impact on profit and sustainability.

Systems are the key to efficiency. Systems aren’t a new phenomenon, but what is new, is the delivery of business management systems in the ‘cloud’.

The cloud has revolutionised the delivery of systems, once only within the reach of big business with big budgets. The cloud has blasted the barriers to entry for innovative newcomers to the business management scene.

Some of the systems you can access in the cloud are:

  • Job management/time tracking
  • Point of sale
  • Expenses management
  • Stock management
  • Accounting/bookkeeping
  • Invoicing/debt collection
  • E commerce
  • Human resources management
  • Content management
  • Booking systems
  • Workforce management (esp. mobile)
  • Customer resource management
  • Bookings management
  • Business reporting
  • Share portfolio management
  • Events management

This is by no means an exhaustive list and you can bet there are people developing industry specific efficiency systems as you’re reading this right now.

The cloud has opened up fantastic opportunities for innovators to recognize a niche market or need, and develop a solution without the huge implementation costs. This translates into cost effective solutions for businesses.

Imagine the time/cost saving of customers being able to go online and make their own bookings. Airlines have been doing it for quite a while now. This would leave staff free to spend time doing other more proactive tasks, such as marketing or product/service improvements.

Human resource management is a minefield and a bigger issue these days, with the huge amount of legislation and compliance involved. There are cost effective systems available now to guide you through the whole process of hiring, managing and firing.

Some statistics on the unfair dismissal costs – collected recently. “According to a new Fair Work Commission report, on average employers are forking out between $2,000 and $4,000 in ‘go away money’ in 60 percent of unfair dismissal cases settled at conciliation. This equates to a staggering 6,604 cases between 1 July, 2011 and 30 June, 2012. Some cases have involved sums between $30,000 and $40,000.”

A cloud based system to get it right could cost as little as $49 per month.

One example I recently heard of was a bookkeeper who was working part time for a business doing the books on a desktop software system. By changing to a cloud system, and setting up many efficiencies, due to its ability to link automatically to the bank account, she saved five hours a month. A typical bookkeeper would charge a minimum of say $50 per hour, so that’s a saving of $3,000 per year! Sure you have the subscription cost of the software but that’s only $600 a year.

A great benefit of cloud systems is accessibility from anywhere. As a business owner you may not always be at the business premises when you want to access information. With a ‘cloud’ system you can simply log in from wherever you are in the world, to keep informed and in control of what’s happening.

Saving service staff from having to visit an office to provide job details or fill in time sheets can be a massive cost saving. Imagine a business with say 10 service staff on the road, who are charged out at $100 per hour for 48 weeks of the year.

If they could save say 30 minutes a day of travel/reporting time, that could potentially save the business $120,000 per annum i.e. $100 x .5 x 5 x 48 x 10 = $120,000 saving or extra billings.

I’ve actually heard of a plumbing contractor who saved much more than this with a mobile workforce management system.

Cloud systems are also designed to link to each other, so you get the added efficiency of not having to double handle information. They can simply dynamically transfer data.

Once you start to link systems you can come up with a very powerful business management reporting opportunity.

Think of this! What if you could see at a glance all your KPIs (Key Performance Indicators), of all the key areas of business management, such as Marketing, Sales, Operations, Finance, HR, Customer Service how powerful that would be. You, as a business owner, could look at one dashboard in ‘real time’ to see exactly how the business is performing. Watch this space – it’s being worked on right now!

System to system transactions are, and will create yet more efficiencies e.g. where two businesses use the same system they can electronically exchange information without the need for human intervention.

Obviously systems are only as good as the ‘set-up’ and the quality of information fed into them and the relevant business management reports produced. It’s well worthwhile investing in ensuring they’re set up right in the beginning, with the aim in mind of what you want to get out of them, including the all critical business management reports to help improve your business.

One last comment on the cloud is the environmental concern. The saving in travel, packaging, freight, paper etc. is potentially a planet saver.

www.CFOonCall.co.nz

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