Identifying the source of inefficiencies and whether it’s worth fixing.
Chances are you’re the type of person who won’t bother to read down to the bottom of this post, so let me make my point very clear now: Do not even entertain purchasing any type of business software, ever, unless you are 110% certain that you know precisely what problem you are trying to solve, and the exact cost of leaving it unresolved.
As the managing director and founder of Unisaas Ltd, it is perfectly within my own interests to sell our suite of business management modules. However, when clients come to us for the first time, it’s all about the demo and the functionality and then the cost (in no particular order). But this, in my opinion, is the wrong tactic.
Firstly, you cannot evaluate and choose a solution, unless you are crystal clear as to the problem. And if I am to show you a solution, I also need to be crystal clear about that same problem. We’re not in business to make a ‘quick buck’ and I have personally turned prospective clients away when we haven’t both been clear as to the problem and the solution.
We start the conversation by establishing the challenges faced in your particular industry sector and what it is you are trying to achieve. Having established this we then form a list of priorities to establish what needs resolving first, then calculate the cost of leaving these issues unresolved.
Nearly every single organisation that I speak to, the problems that they talk about actually come down to one fundamental cause – They’ve previously gone ahead and bought multiple software platforms and are having a nightmare either trying to integrate them or collating the data from systems that can’t be integrated!
Sound familiar? Here’s how to help you understand what it’s costing you NOT to fix the problem…
Are disjointed and disconnected systems wasting valuable time & money?
Let’s just say you’re working some safety management software. In another department someone is using contractor management software. Then some of your colleagues are running project management software. Alongside of this your sales team will be using client management software, or a CRM system, and so on. You will probably be thinking of other examples.
When management wants to see a report of what’s going on, how long does it take to collate data from these disparate systems, and how much data is left out because it’s too much hassle to retrieve?
If yours is a large organisation, it would be unrealistic to say that you could be losing 50+ hours a month, at £50 an hour by the time you’ve taken into account wages and operational costs. Already we’re at £2500 per month in wasted time.
So you look for a fully integrated ERP system which costs £50,000 – £100,000 per year, because of the wonderful efficiencies it brings. But if you haven’t clearly defined that the cost of the problem is actually just £30,000 per year, it won’t be very long before your accountant establishes this and suddenly you’ve wasted more time and more money to no effect.
Are you managing data in multiple locations?
Large organisations will likely be having this same problem across multiple sites or locations. The same data is being entered in and utilised in much the same way at different locations, yet still not properly integrated, and possible costing a similar amount over again.
This is not anybody’s fault necessarily, I don’t agree with the blame game, it’s simply because your data is disjointed and can’t quickly and easily be retrieved, collated and reported on.
Surely, as you’re reading this, the realisation is becoming clearer of just how much time and money is being wasted for no better reason than that the various software systems you may have in place, simply don’t talk to each other.
Time to integrate.
Now I’m not going to pretend that I know how your business works or what the costs are in each department, suffice to say that for every mistake, for every hour wasted, for every task overdue, for every injury or incident, for every lost client, for every late project, for every item of lost inventory there is a cost associated to that. I think £50,000 per year would be conservative, if we’re brutally honest.
Again, you will be thinking of other more specific examples.
One thing I will say with reasonable certainty, is that for the current software systems that you are using, there is nearly always overlap in functionality. So, if you are spending, say, £50,000 – £100,000 per year on multiple software systems, and there is let’s say a 30% overlap in functionality, it’s not unrealistic to say that you are wasting £15,000 – £30,000 a year on replicated functionality.
This is over and above the £30,000 per year we thought about at the beginning of this post.
The final point to consider is the labour required in trying to manage fragmented data from systems that aren’t even designed to integrate. This is soul-destroying work and usually larger organisations will have a full-time person just to over see the manual flow of data between systems, and could quite easily be using up 10 hours a week manually importing and exporting and using excel as the medium on which to bring all this data together.
That’s 10 hours at, shall we say, £20 per hour including operational costs. £200 per week x 52 = £10,400 per year.
Cost of the problem – £30,000
Cost of loss – £50,000
Cost of duplicated functions across software – £15,000 – £30,000
Cost of managing data – £10,400
£105,400 – £120,400
Now this is conservative, and somewhat hypothetical I agree, but unrealistic? I don’t think so.
Is this a problem that needs solving?
Absolutely, assuming that there is a system that exists that will bring all these areas together and cost less than the problem (which there is, by the way). I wouldn’t be drawing your attention to this if I didn’t feel that there was any value in Unisaas Business Management Software.
But that is not my objective right now. I want you to understand that before any buying decision takes place, you need to understand these cost areas with extreme clarity, and only then can you decide what represents good value for money.
Once you have this clear understanding, it will help you to focus when sales guys are showing you all the wonderful functions of their systems, without paying any attention to your problems, which are currently costing you a lot of money every day.
So even if you see a product that looks the part, you will not be duped into buying it if it will cost you more than your problem. That makes sense, right? If it is going to save you money then you can be confident when presenting the solution to the board for their approval – of both the product and you.