by Richard Milam, the Founder and CEO of EnableSoft Incorporated
Budgets are a tricky facet for any business owner however being one of the most critical aspects to the operations, productivity, profitability, and growth of a business. Every year, dynamic markets, the state of the economy, and consumer demands change the requirements of a business and the costs of operation. In addition, today’s advancements in technology have disrupted the workforce, transforming the nature of work, and has afforded businesses the ability to become more productive as they restructure their workflow and employee workload.
Business owners, CEOs, and CFOs must include three key elements in their 2016 financial plan.
1. Invest in disruptive technologies.
Disruptive technologies are advances that transform life, business, and the global economy. Nineteenth century anthropologist Lewis Morgan considered the rate of inventions as the prime mover in the evolution of societies, stipulating that the key to moving up or down the evolutionary scale resides on society’s ability to create inventions and discover powerful methods of moving forward. Technology means progress, which is why business leaders must be keen on investing in those critical technologies that will help their business grow in the future. In fact, McKinsey Global Institute (MGI) reports 12 technologies that will alter the business and social landscape: advanced robotics and the automation of knowledge work, to name a few. Many organizations may already use, and pay for, various applications that perform transactions, process payments, and store customer information; however, these are very task-specific applications and often do not integrate. As a result, employees have difficultly navigating and executing their duties, which slows productivity — a direct opposition with the goals of the business.
According to MGI, Robotic Process Automation (RPA) is the future, and smart business owners are quick to adopt technologies that will save them money and enable them to progress their company. Automation technologies, such as EnableSoft’s Foxtrot, are able to perform numerous data-related and business processes because they are configured by humans; thus, businesses no longer require multiple applications to keep the business functioning, one RPA tool is all that is needed to perform at an optimum operational level. You do not have to be a financial analyst to know that investing in one technology that can replace several applications and programs, and even perform other operational functions, is much more cost effective in comparison to the cost of multiple applications performing at minimal efficiency.
2. Gain more from your employees.
Implementing these next-generation, impactful technologies into your workflow requires your employees to be able to work with them, not against them. Taking a look at your entire organizational schema and who (human) or what (robot) performs which processes is vital to the budget. Most organizations find that once they become more efficient by automating their workflow, their profitability increases. They are afforded a quicker cycle time, enhanced customer service, and innovative product development; however, this relies on the ability of business leaders to educate, inform, and encourage their employees to use their intelligence in order to do work that aligns with the company goals. Peter Drucker coined the term, “knowledge worker,” in 1969, which describes the individuals in an organization whose contribution materially affects the capacity of the organization to perform and obtain results. In other words, your employees must apply their knowledge in ways that add to the growth of the business. If the knowledge worker is stuck in an endless loop performing repetitive business processes, she or he is not using their knowledge to produce — to contribute ideas and information to the business.
This is why it is crucial that executives implement technological resources that direct their employees towards performance and production. The organizational workflow and schema must be considered in order to optimize internal efficiency, which ultimately reduces costs. The output gained from employees as a result of implementing RPA tools will greatly offset the cost. Your company will be a well-oiled machine when humans and robots effectively work together, such that the digital technology, or robot, performs the repetitive processes and the human performs the knowledge work, both of which are required functional operations of the business. In fact, businesses are discovering that they no longer require financial analysts to access their books, what they need are process analysts to review their organizational schema to guide processes. Businesses become more profitable when robots perform the tedious, repetitive tasks and humans perform the higher-order, thinking tasks.
3. Manage inventory and cut your tax bill.
A thorough year-end review of purchases and what they were used for is essential to controlling one’s budget, especially if it means you have an excess of something that you can eliminate from the budget for the new year. Furthermore, when you have an understanding of your inventory and what was effectively used to progress the business, then one can better prepare for future expenses. Perhaps, you purchased marketing items that were not a “hot sell” at marketing events, or perhaps you purchased additional computers that were not used. Managing your inventory enables one to accurately budget for specific expenses, and an inventory analysis compliments a review of taxes in order to reveal what can be deducted and written-off. For example, those new computers you purchased may allow for significant tax deductions. Lastly, now is the time to clean up your books and collect from those customers who may be delayed in payment. By keeping updated accruals throughout the year, you can finally “write-off” debt that may never be collected. Keeping a keen eye on your inventory along with a detailed review of your tax bill enables one to make informed decisions when budgeting for the new year.
Business leaders who use this methodology when analyzing and creating their budget for the new year understand that in order to progress in today’s digital world, they must invest in those critical technologies and integrate them into their organizational workflow. By enabling knowledge workers to automate their manual tasks (reducing costs) and optimize their intelligent tasks (increasing profits), in addition to managing inventory and controlling taxes, business owners, CEOs, and CFOs can control and create a cost-effective budget.
Richard Milam is the Founder and CEO of EnableSoft Incorporated (www.enablesoft.com). EnableSoft, is engaged in offering game changing software products and services to the business and financial services industry, healthcare and a dozen other markets. EnableSoft serves over 500 corporate clients worldwide. Prior to founding EnableSoft in 1995, Richard was a partner and served as Senior Vice President of FiTech PLUSmark, Inc.