It’s ironic that information technology businesses — which are so focused on providing cost-savings and efficiency-related solutions to customers — often don’t practice what they preach. Too often IT managers and workers busy themselves with activities that don’t improve the bottom line, don’t generate new custom and simply waste precious hours from the working day.
One thing’s for certain, cutting overheads, streamlining processes and automating busywork is a great idea for most IT businesses — if it’s done right.
And there certainly is a right way and a wrong way to do it. Getting rid of unnecessary meetings? Hell yes. Keeping departments 5% understaffed? Err, no.
The fact is, containing costs and increasing efficiencies needn’t be painful. Rather, a few smart choices, implemented well, can make a world of difference, keeping expenditure in check, workers productive and a firm competitive.
So where to start? We’ve collected some of the best wisdom on the issue and compiled it here.
1. Quit printing
Still printing stuff out? Don’t.
Take this advice from Money Crashers:
“According to research by Xerox, about 40% of office paper is discarded within 24 hours of anyone printing on it. If you add up how much you spend on printing supplies, paper, and labor, you’ll quickly see that using electronic file storage can save you loads of money. By making use of free online space through services like Google Docs, Microsoft Office Live Workspace, Amazon Cloud Drive, and DropBox, you’ll be putting the dust jacket on the money-draining printer in no time.”
“For some businesses, just going paperless might not solve their addiction to in-house servers for data storage,” says Bigtime Small Businesses. “Dump those old clunkers and save the cost of repairing and maintaining them by signing up for DropBox or Google Apps for business, which includes Google Drive for creating and storing documents.”
And if you simply must print, use print quotas to keep it to a minimum.
2. Office Space
“The recurring cost of renting office space is usually the largest cost on an income statement,” says Mike Michalowicz, of Profit First. “Good times or bad, every month you’ve gotta pay that rent. You have three options that can save you big money. First, convert your business to a virtual presence. You can have your employees work from home and get rid of the office in its entirety. Second, approach other spaces that already have tenants committed to long leases. More and more tenants have extra space, and you may be able to pick it up on the cheap. Third, renegotiate with your landlord. With a soft demand for office space, landlords are becoming more flexible on the rent, to keep you in.”
Other options include trying non-traditional spaces and renting out your office space on the weekends.
3. Be open to telecommuting
As mentioned above, telecommuting is surely the buzzword of the moment, but many of us are still hesitant to commit. Now may be the time however, according to the Wall Street Journal.
“Craig Smith, founder and CEO of Trinity Insight LLC, an e-commerce consulting agency in Philadelphia, boosted his company’s efficiency with free software that lets employees access their office computers from home. Before these tools, such as LogMeIn, Trinity Insight would have to deal with employee absences for doctor appointments or family illness. That meant key tasks weren’t being done in a timely matter.”
“Having employees being able to get tasks done from home allows the business to run more effectively and allows us to ensure that client needs are being met,” says Smith, “while at the same time allowing our employees to have a work/life balance.”
4. Ditch unnecessary meetings
Meetings can be a gigantic waste of time if not managed well.
“One problem commonly afflicting meetings is unclear objectives,” says Victor Lipman writing for Forbes. “If you’re not exactly sure what you’re trying to accomplish, you can be sure it won’t happen quickly. As meeting organiser, it’s your responsibility to have clarity about objectives. Consult with another team member if you need to; a little extra time at the front end will save more time at the back end.”
“Ask yourself, carefully: Do all of these people really need to attend? Or could some of them just receive a brief email summary or quick call afterward? If you can reduce a half-hour meeting list by, say, four people whose presence isn’t essential, that’s two hours of productive time effortlessly returned to the company.”
5. Piggyback promotions
Marketing is huge cost for many business, but it needn’t be. A little creativity can go a long way to getting your message in front of people while keeping costs down.
These tips from Entrepreneur highlight several ways to get the most from a shoestring marketing budget.
“Including advertising material in other mailings, such as in invoices, saves postage and other costs”, says J. Donald Weinrauch, co-author of The Frugal Marketer. Likewise, make the most of your point-of-purchase opportunities by tucking coupons, newsletters or other promotional fliers in the bag with customers’ purchases.”
“Are you letting people know what your URL is? Try putting it on your letterhead and business cards and in email signatures – wherever potential visitors are likely to see it. Include it on employee uniforms, any promotional items you give away, all press releases, in your Yellow Pages ad and on company vehicles.”
6. Practice bottom line responsibility
Looking for the final word on avoiding waste in the workplace? Ask the experts: your employees.
“One of the most overlooked methods of radically cutting costs, without compromising the business in any way, is to seek guidance from your own team.”
“Have a company-wide meeting and educate your employees on the P&L and the need to cut costs. Empower them to bring suggestions to the table and to act on them directly. One company, for instance, had an employee who suggested everyone bring in a coffee mug from home instead of using disposable cups. It saves the company $100 a month.”
“Similar ideas were implemented throughout the company, and the company turned profitable as a result.”
7. Pay invoices early
“Many suppliers offer discounts for paying invoices within the first few days of receiving them,” says Nicole Fallon of Business News Daily. “If you have the cash, paying early is a great way to build long-lasting relationships with your suppliers.”
Similarly, making sure you get paid as early as possible is crucial for maximising cash flow and preventing difficulties when it comes time to pay your creditors. Third-party emails to debtors are one very effective way of managing overdue invoices.
They offer you the opportunity to be polite and persistent, but to also leverage the fact that another party is involved in the communication and the knowledge (on everyone’s part) that things can and will be escalated if need be.
“The surest way to make your processes more efficient (and to avoid those awkward conversations) is to use debtor automation software such as Debtor Daddy to create a consistent, repeatable process for invoice collection. Once it’s set up, the software manages the chasing of unpaid invoices at the click of a button, saving you time, preserving those delicate customer relationships and removing the need for uncomfortable invoice-related client interactions completely.”
8. Renegotiate (with everyone)
“You shouldn’t just be wrangling better deals from your credit card companies; you should also negotiate with your suppliers,” says Business News Daily. “Most suppliers are amenable to the idea of negotiating prices, because they would rather do so than lose a regular customer.”
Similarly, when it comes to procurement, always get three quotes. “It’s tempting to go with the first quote for whatever product or service your business might need,” says Cory Owens. “While that may save you some time, it can also lead to overpaying. Whether it’s an Internet provider or roof repair, always shop around to make sure you’re getting the best deal possible. Keep in mind that price may not be the only determining factor. Referrals, reviews, quality of service and speed may also be factors that are important to you. The point is you won’t be able to make an optimal decision with just one quote.”
9. Ditch the fax line
Faxing is an office staple that’s well outlived its utility. Ditch it now.
10. Outsource what you’re not good at
“IT teams try to do things which they are not good at simply to maintain a sense of control, eg, an Application services team managing its own servers,” says Chris Curran, chief technologist. at PwC.
“This will not be their core competency and they will not be able to focus on driving efficiencies in managing the servers. Have a separate team manage servers and create incentives them to reduce cost of operations.”
11. Automate the important stuff
“As a small business owner, you put in a lot of hours, but time is still a limited resource,” says Suzanne Kearns of Money Crashers.
“Wasting time can cut into your sales and hurt your bottom line. As a general rule, anything that you can implement to save time will also save you money in the long run. If you don’t feel you manage your time wisely, look into some effective time management techniques and stop procrastination at all costs. This is probably the biggest lesson that I’ve learned in my time as a small business owner.”
Automating key processes, such as chasing invoices, saves time, maintains crucial cash flow and keeps you focused on the job at hand.
12. Eliminate inconsequential actions
“Do you prepare long reports with comprehensive data when only exceptions matter or when the true consequences of variances are quite small?” asks the Harvard Business Review.
“Do you prepare reports that cover short periods of time or are delivered in real time, when longer periods or slower reporting would meet the need just as well? One client, we discovered, was still employing several full-time clerks to sift through daily reports and manually highlight ‘important’ variances long after a systems enhancement had changed the company’s understanding of which variances were large enough to matter—negating the need to examine 95% of them. What was worse, a senior executive’s assistant recognised that the reports were no longer useful, so she had stopped giving them to her boss. And since she had no knowledge of the effort required to create them, she had not notified the reports’ originators.”
Work to eliminate activities that provide limited value, especially those tasks which require excessively repetitive actions or can be easily automated.
Article by Jonathan Cotton, content marketing manager at Debtor Daddy