How Much Money Are you Wastingby not Leveraging Business Process Automation?

How Much Money Are you Wasting by not Leveraging Business Process Automation?

By Barbora Jassova - 10 Nov, 2019

cutting-small business costs

One of the most common arguments of small business owners against business process automation is the lack of time and money. Sure, workflow automation has its price and requires attention to ensure the implementation processes goes smoothly. However, are you really lowering your small business costs by avoiding it?

Turns out, it’s the very opposite. Not leveraging automation is the more wasteful of the two choices. While automation has its price, it only costs you once. Ineffective manual processes, on the other hand, will be draining your resources year after year (provided you do nothing about it).

Here are several concrete examples of how manual processes can drive up the costs and side track the growth of your small business.

1. Cost of Time


Paperwork and data entry simply need to get done. These are constants necessary to keep your business alive but don’t affect its growth directly. Yet, they seem to take up a lot of your employees’ time. How many hours does your staff dedicate to filing, faxing, routeing documents or inputting data into an endless stream of spreadsheets? Yes, a lot, we know! Manual data entry and paperwork expensive because they are slow and never ending. No matter how many hours they swallowed, they are always after more.

2. Human Errors

How many times have you spent hours working on a spreadsheet only to discover you have incorrect data or there is a mistake in the formula? Manually collecting, verifying and inputting data, manually constructing Excel formulas, manually building charts and graphs are all swarming with opportunities for human errors. The more monotonous the task, the higher the risk attention lapse.

3. Lost Business Due to Complex Customer Facing Processes


When things don’t go as smoothly as you would wish, your employees are not the only ones who get frustrated. The efficiency with which you approach customer inquiries, questions and concerns directly affect your business.

If your client ends up on hold for 30 minutes because you cannot manage to locate the invoice, he is asking about; if the purchased merchandise gets frequently lost, or if grumpy burnt out employees keep answering the phone, you have a problem. Today’s market is unforgiving, every customer matters. After all, it costs on average five times more to attract a new customer than retain an old one. Sticking your old processes can severely hurt your business, especially if it’s starting to pick up.

4. Dependency Cost

This brings us to fairly painful dependency cost. What is it? Well, let’s say, there is a great elaborate system regarding the spreadsheets as well as filling methods. All that thanks to Sarah, the miracle worker you hired last year. She is the go-to person regarding all data and paperwork. And everything is just fine until Sarah goes on holidays, takes sick leave or, in the worst-case scenario, moves on to another job.

5. Disorganisation and Duplication of Effort

As if that wasn’t enough, these fractured tasks are at the root of duplicated efforts. Let’s say one day you needed to solve a particular issue, and you created an elaborate spreadsheet that helped you solve it. A few months later another person had a similar problem and ended up spending hours solving it, again. All this, because there is no organisation and visibility of what other employees are facing. Duplicating effort and perpetuating the problem by not addressing it holistically is an incredible waste of resources.

6. Employee Dissatisfaction & Waste of Talent


Sarah, your favorite former employee left, but did you ever wonder why? After all, she did an excellent job!

Sadly, it’s probable that the price she had to pay for doing such an excellent job was just too high. Without a central support system and lack of proper structural procedure, her job of keeping everything together and organised was next-to-impossible. She might have had trouble getting the data she needed from other employees on time, people retrieving documents without notifying her and the failing to put them back into place… Also, there is a great chance her talents could have been used on much more creative tasks that would help your business. How many times had it happened, you hired somebody with great skills for your sales team or customer service, but the person ended up spending 50-70% of their time dealing with data or paperwork because it needed to be done?

Companies that rely on manual business processes often experience quick employee turnovers because of the stress and frustration stirred up by the lack of an intuitive workflow. Similarly, keeping your employees busy with mundane tasks stirs them away from devoting to more creative, intricate work that could help your business grow and improve.

7. Opportunity Cost

Last but not least, there is the opportunity cost. Simply, if you are busy inputting data and fixing errors you’ve very little time (if any) left for analysing and understanding them. Being able to analyse and learn from them is perhaps the only great thing about otherwise mind-numbing data collection. Lack of automation singlehandedly takes away opportunities for growth, efficiency and improvement.

So, what now?

Although revealing how much of your small business resources go to waste is a bit terrifying, don’t be scared. Realisation is the first step to improvement.

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