For those of you familiar with my last post (5 Ingredients Businesses need to Cook up a Storm Post Covid), my confidence and ability to cook tasty meals has continued to evolve, so much so that I am now getting requests!
While I continue to learn, thanks to Jamie Oliver’s book (5 Ingredients) I have learnt the fundamentals of cooking - the importance of preparation, how to prepare ingredients even down to how to cut certain vegetables (yes, I didn’t even know how to do this!), how to coordinate the cooking of one or more ingredients to ensure the tastiness of the meal, and the importance of sticking to the recipe to name a few.
As I alluded to in my last article, on Father’s Day I received Jamie’s new book 7 Ways, the premise being ‘to provide 7 achievable, exciting and tasty ways to cook 19 hero ingredients’.
Having now got your business fundamentals in place, a platform for growth if you like, as your business recovers and growth reoccurs the concept of this new book made me think of the importance of Technology as a hero ingredient for businesses of all sizes to support scaling a business.
So, with this new found inspiration I would like to propose another recipe:
Rod’s Recipe for Re-Scaling Your Business Using Technology
If you have followed my previous recipe, you have now reviewed your business and understand your Cashflow projections and the particular strategies (for Customers, for Suppliers, for Expenses and for Staff) your business needs to successfully execute to ensure it is able to grow through and out of the current downturn.
If you put the appropriate level of focus on the execution of these strategies, the next challenge your business will have is scaling (or re-scaling) one or more key business processes to support growth.
When a business is able to scale their business, this means that they are able to handle an increased amount of work without impacting the cost of delivery or the quality of customer outcomes.
Your first inclination to address the growth may be re hiring some of the staff that you previously had. However, the other way of scaling your business is by automating one or more key business processes using technology.
So, what should you automate? How do you identify opportunities for process automation?
I believe there are 3 main areas for your consideration, including a hero ingredient - Technology.
1 – Cashflow Forecast
2 – Business Processes
3 – Technology (the hero ingredient)
Step 1: Cashflow Forecast
Understanding your business’ cashflow is critical at any time, but important when considering how to address scaling your business due to growth. To be able to make appropriate decisions to address scalability, preparation is key.
If you followed my last recipe you will now have a cashflow forecast you are reviewing on a regular basis governing your recovery. If you do not have a cashflow forecast, please review again 5 Ingredients Businesses Need to Cook up a Storm Post Covid, which outlines how to build one.
Step 2: Business Process - Identify opportunities for improvement
Imagine that your business just signed a new customer(s). You have two options to fully serve them:
Option 1: You hire one or more new employees to help your business manage the additional workload, or
Option 2: You use your existing employees to deliver the product or service
While you grew your revenue when you signed on the new customer, with Option 1 you increased your costs at the same rate by hiring, and with Option 2, you impacted the delivery of your service outcomes for not only your new customer, but your existing customers. The first option may not be cost effective, and the second option may impact employee productivity and quality of service delivery. Further customer acquisitions will exacerbate the impact of the negative aspects outlined for each option.
For future decision making, you will be updating your cashflow forecast with any additional revenue or costs to understand their impact on profitability.
As a result of acquiring your additional customer, what are the three most time consuming, repetitive or manual delivery processes in your business?
List your top 3 opportunities for improvement.
Step 3: Business Process - Quantify the impact on the Customer, and your Business
Now that you have identified possibilities for improvement, we want to choose one process that has the ‘best bang for buck’ to automate. Particularly if this is the first time your business is automating a process, it is important to automate one process at a time.
What is the amount of time spent working on each process?
What is the cost implication of this effort for each process?
What is the impact on delivery of customer outcomes?
For each of your listed opportunities for improvement, collate the time and cost implications of these processes and the impact on the delivery of customer outcomes.
Step 4: Business Process - Prioritise
If you want to realise the maximum benefits of automation, make sure you pick a process that consists of highly repetitive tasks, which when automated significantly reduces manual intervention.
From your listed opportunities for improvement and their respective impacts, identify the one opportunity with the largest impact on the delivery of business processes.
This will be the process your business should consider automating.
Step 5: Applying Technology
Process automation does not have to be hard – it could be as simple as implementing an excel report hooked up to your database, deploying a macro in excel to assist with end of month financial accounting, using auto email alerts through to implementing OCR to scan invoices, and other documents – simple solutions that have huge time savings potential.
However, automating processes involving large volumes of unstructured data (includes text, images, videos, or web content) is difficult using traditional technology solutions.
For instance, let us say your manual business process is reviewing unstructured data (such as a CCTV video) and manually counting objects (eg: people, vehicles, animals) or identifying an event (eg: falling over, moving in or out of an area). The manual process is time consuming, not cost efficient, is not 100% accurate due to human error, and can have elongated processing times.
There are now technologies such as Artificial Intelligence (or AI) including Machine Learning that can be applied to support the automation of such business processes. Leveraging the example above, the same video can now be analysed, objects and events can be identified, and actions (eg: notifications, reporting) can be made in near real time.
As a business owner, you should not be expected to be an expert on the use of technology. You should seek advice from your internal IT or an external technology advisor on how best to use technology to remove (or reduce) the impacts.
There will be a financial cost of implementing Technology in your business to automate the business process you selected. This should be offset by the efficiencies identified. Update your automation cashflow forecast with the respective costs.
Now knowing the facts, you need to make the decision whether to move ahead with the automation implementation. Please ensure that you add the appropriate level of communication and leadership staples to support the achievement of the planned benefits for the automation.
Which business processes are limiting your scalability?
Who is your trusted technology advisor?
Who will be responsible for implementing the technology solution?
So, the good news is I am no longer struggling in the kitchen. I now have the confidence and capability to cook on my own, to adapt recipes by adding more colour, to substitute ingredients, and to sometimes not follow the recipe line by line.
Yes, I have come a long way. But, cooking is not going to be a long term career or hobby – more a necessity. While I have the fundamentals, I will always be looking for shortcuts or time savings to make things simpler. As part of this investigation, we have started a trial of Hellofresh – quality ingredients for tasty and easy-to-cook recipes ordered online and delivered to your doorstep. Stay tuned on how this has saved time and money.
If you need assistance or support with this particular recipe, either to assist you in identifying the business process(es) most suited to automation, which technology can be applied to automate the process, and the timeframes and costs, let me know.
Rod is a business advisor providing smaller businesses with the necessary skills and processes to deliver their business improvement and turnaround initiatives in the role of advisor and delivery manager. In particular, based on 30 years advising and delivering large and small enterprises on technology projects, Rod has provided guidance and support to businesses on how to use technology to grow or to support the scaling of businesses. For more information refer to www.transcendhcs.com.au.