Justifying the Cost of Technology
The adoption of new technologies takes time, effort and money; however, I have
found that the implementation of the right technologies always pays for itself
in terms of time savings and improved accuracy.
Technology can improve employee performance and save labor costs far in excess
of the cost of that technology; therefore technology really costs you nothing.
You can test this theory by comparing the revenue per employee generated by the
Fortune 500 companies before the computer craze (say 1980) to revenue per
employee generated today. The comparison is staggering. Today’s employee
generates from five to twenty times the revenue today compared to 1980 (even
after adjusting these amounts for inflation). People aren’t that much smarter
today, they just work far more efficiently. Consider these examples:
Letter Writing –
I started my career in 1980 when the process of producing a letter involved
handwritten drafts deposited in secretarial pools where eventually the letter
would be typed and routed back to the author. A series of handwritten edits and
revisions followed, including a typed envelope. This process could take several
days to complete, copies were then made and filed away, sometimes in duplicate
or triplicate. Later these files were archived or shredded - a process requiring
yet more labor. Recording archived papers and retrieving them could take up to a
half hour. At the time Xerox estimated that each page of paper produced by a
corporation in 1980 cost about fifty dollars to produce, handle and store once
all costs are considered. Today, letters are prepared faster on computers. Built
in tools check spelling and grammar. E-mail systems send these letters
immediately and archive them as well. The cost of producing that same letter
today is estimated to be less than three dollars, and some estimates are far
lower.
Time Sheets & Expense Reports -
In the 1980’s the manual time sheets and expense reports I prepared required
handwritten reports including detailed calculations. Other employees would
manually gather these reports and re-enter the data. Both procedures were prone
to human error. Today many employees operate far more efficiently by entering
their time and expenses into web browsers using convenient drop down boxes.
Input time is dramatically reduced, the need for hand calculations are
eliminated, errors are far less frequent, the need to re-enter data is
eliminated, and built-in logic rules automatically check data for errors as
entered.
Ordering -
In the 1980’s, companies employed a labor intensive reordering process which
included manual inventory counts, comparisons to desired stock levels,
preparation of purchase orders, mailing orders or manually phoning them in to
the suppliers, re-entering orders by the suppliers, etc. This process was slow
and subject to redundancy and errors. By contrast, today’s automated supply
chains track goods sold and automatically reorders those goods when optimum
re-order points are reached. Electronic orders are sent to the suppliers
accounting system automatically for immediate processing. There
is virtually no labor involved. Built-in logical rules ensure that goods are
reordered at the optimum times, and at optimum quantities. Just-in-time
inventory systems have dramatically reduced the order to shelf time from about
90 days (for J C
Hundreds of similar examples regarding direct deposits, bar code scanners,
cellular phones, financial reporting, the Internet, CRM tools, printers, faxes,
e-mail, spreadsheets, etc. offer proof that technology has dramatically reduced
the expenses for all business large and small. Given the dramatic impact
technology can have on a company, it is folly to believe that one-time
investments in computers alone are enough. Companies should embrace and update
their technologies each year including computer hardware, software, training,
peripherals, and infrastructure. If a microwave oven took 8 hours to bake a
potato, you would never use that microwave oven. Likewise, if your slow Internet
connection takes 10 minutes to dial up, get connected, search, surf and find
what you are looking for, it is doubtful that you will use that Internet
technology to its fullest.
It has been said that “the latest thing these days is computer dating – if you
don’t know how to use one it really dates you”. Don’t get left behind, roll up
your sleeves and embrace the latest technologies that will make you more
efficient and competitive in the market place. These days “thinking cheap” may
be the most expensive mistake you can make.