Keeping a watchful eye over the company’s budget is second nature for most executives, but in challenging times, maintaining budget oversight and cutting overhead is something that becomes not just important but imperative.
The executive team at MIS Group, one of the nation’s premier software and technology service providers, recently talked with Smart Business about how to use technology to help customers improve efficiencies and dramatically cut costs.
Why is it better to manage electronically than with paper?
Tom Cofer: Producing, handling, sending and storing documents are time-consuming and expensive. A document management system can accomplish several things. By scanning and maintaining documents electronically rather than in physical files, workflow is streamlined, customers are invoiced more quickly, and the costs associated with the production and movement of paper are greatly reduced (including things like remote storage fees). We have a customer who moved to this type of system and immediately saved $900 a month on the FedEx fees that were being spent to route invoices.
What tools can you recommend?
Lee Hagen: People spend hours and hours every day copying and pasting data into spreadsheets to satisfy bosses who request different views of different data. I know, because I’m one of those bosses! I advocate the use of business intelligence tools, which are easy to use and affordable for almost any business. This type of software allows team members to slice and dice data in lieu of creating multiple views of that data in various spreadsheets.
Don Zelezny: I also see the value in business intelligence products. BI technology isn’t just about using a dashboard to get updates on where the business is today. It can also be used in very practical ways. If a customer promises to pay a bill in a week and the week passes with no sign of the promised payment, an automated e-mail can be sent to both the salesperson for follow up and to the customer as a reminder.
So should technology replace humans in some processes?
Chris Spivey: Using technology to automate processes can represent sizeable, cumulative savings. To prevent fraudulent accounting transactions, one of our customers was strongly advised by auditors to add an employee in order to segregate accounting responsibilities. This would prohibit one individual from being able to both create a vendor account and cut a check. With two employees, the only way a ‘ghost’ vendor could be created, paid and removed from the system was if both parties were in collusion. But the auditor’s ‘solution’ would have cost the company as much as $40,000 per year.
A better solution is to put an automated control in place with a tool used to monitor the vendor data. When a vendor record changes, the monitor sends an e-mail to the controller, who reviews the transaction. This solution (even after factoring in the software purchase and maintenance fees) will net the company an estimated $112,000 savings over three years.
How can companies shave IT expenses?
Chuck Reeves: IT overhead represents a big expense for even the smallest companies, but many companies are afraid to make any radical changes in the way support is handled. One of the best ways to decrease cost, cut head count, and gain a higher level of skills and more experienced support is to use managed network services. This is a cost-effective way to approach IT management.
The same concept can be applied to printing. By putting the care and maintenance of your copiers and printers in the hands of a good provider, a company can decrease the cost of supplies and parts, decrease the number of vendors and transactions (orders, inventory, etc.), and improve efficiency and productivity.
Another effective way to slash overhead is to reduce hardware maintenance and renewal costs through virtualization. There are many simple ways to implement virtual servers and desktops for quick savings.
How else can businesses save money and create efficiencies?
Technology should be an investment, not an added expense. Technology can be leveraged to bring substantial, sometimes immediate returns. Here are some additional ideas:
- Switch to cycle counting in inventory control
- Replace paper payroll processes with debit cards
- Renegotiate carrier services
- Shorten process cycles with better field connectivity
- Introduce telecommuting and reduce rent
Looking at your business from a different vantage point, through the eyes of those most familiar with technology, is often the key to finding novel ways to cut costs and improve efficiency.
TOM COFER is vice president sales of the construction and real estate division. LEE HAGEN is executive vice president of sales.
DON ZELEZNY is vice president of strategic alliance development. CHRIS SPIVEY is vice president of business process and project leadership services. CHUCK REEVES is vice president of technical services. Contact MIS Group at (866) 467-4181 or misgroupusa.com.
