In my last blog, I wrote about a new implementation we are doing with Microsoft NAV. That got me thinking about some other clients and how they have automated their businesses.
I’m really heavily invested in business processes. I find that without process, business can be a really difficult thing to accomplish. However, I don’t think that automation is necessarily the right solution for every business problem or process. So I’d like to talk about a process we automated and why we did it.
A common request we get is to import sales orders. Sometimes it makes sense to do this, and other times it doesn’t. One of our customers, a distributor, was presented with a new business opportunity; that of taking on a customer with 300 locations. Sounds like a great opportunity, right? Well it is until you find out that the orders are all small, and that the distributor would be required to monitor the budget for all 300 locations. This begs the question, do you want the business, or don’t you? On the one hand, it represented an opportunity to increase business by 15%. On the other hand, it means increased sales order entry transactions of nearly 30%. In order to do that, it would mean hiring at least one fulltime customer service representative. Coupled with the higher per order cost of picking and shipping smaller orders, in contrast to regular orders, this could have resulted in a loss rather than a gain. So, what do you do? We helped them devise a spreadsheet that monitored the budget, listed the authorized products, and was directly imported into their ERP system. Net effect, no new customer service rep, a new customer, and a nice increase in sales volume.
In contrast, another customer received 4 or 5 orders a month via Email. Since the Email format was inconsistent, the program to import the sales order would have been quite costly and would have required constant monitoring by the customer service rep. Since it took very little time for the customer service rep to enter the order, it really didn’t make sense to automate this process because we had no control over the input. Net effect, our customer would not have saved time and would have spent a significant sum of money. They were better off manually entering orders.
So, what’s the right thing to do? First of all, consider your business objectives. Does the opportunity fit your business model? If not, is this a change you should consider? If it is, then what will it require in terms of people? Will the cost of the hires exceed the profit of the opportunity? Simple equation, but, would the deal be more profitable if you could automate it and maintain your current staffing? Those are questions we can help you Answer. And while you’re at it, be sure to consider what other changes will take place in your business process if you do decide to automate? Very often, there are unintended consequences that haven’t been thought through (like higher labor cost per order).
If you’d like to know more about automating a task, please give us call. Don’t forget to check out my new eBook about successful ERP implementations. I’d be very interested to hear about tasks that you have automated and what the effect has been on your business. Let me know by commenting on this blog.
To read about a real-world example of how we assisted a client regarding sales order automation, read our complimentary success story here.