How Quickly Can You Save £100,000?
You’ll be surprised to learn that it’s a matter of months. If your turnover is £1m, you can save £100,000 in just 7 months (sooner if your turnover is greater than £1m). All from improvements to your existing business processes, with a comparatively small investment.
What would you do with that saving? Make more revenue? Invest in your company? Take a well-earned holiday? It’s up to you.
The Digital World
Have you ever considered how reliant we are on electronic devices such as tablets, smartphones and laptops. Would your business be able to cope if they were out of action for a week?
The answer for more business is in the negative, which just shows how reliant we are on electronic devices and software to do our work.
The People versus Computers
Think about a simple example: using a self-service checkout at the supermarket. A typical interaction might begin with you pressing the “Start” button. It doesn’t work. So you try again. You get past that, then… the infamous “unexpected item in bagging area”. You wait for an attendant… you’re off again… only to be held up by the card reader not working properly when you pay.
How much time is spent “faffing”? 20 seconds, 30 seconds? The whole thing takes no more than say 2 minutes, but 20 seconds is spent faffing.
That’s is 17% of your time.
When you think about all the people that use these tills everyday, every little really doesn’t help. Every little is quite annoying.
Add it all up, for every customer, every day, and it’s huge.
What about in the office? You’re at your desk, and you need to find customer records in a spreadsheet. Who has the latest version? Where is it stored again? Or you need to send a contract out to a customer: you’ve got to find the right contract template, key in the details or do some sort of merge, print it out, printer’s not working, get the toner, then you can print it, pop it in an envelope, address it, and put it in the out-tray. Or you’ve got two systems which frustratingly have different CSV formats; you have to manually convert one format into another.
So how much time is lost in the office environment in each hour? 5 minutes, 10, more? If we say 10 minutes in each hour is faffing, that’s 17% time lost.
Time when you could have been doing something really useful. Aren’t computers supposed to make our lives easier?
The Hundred Thousand Pounds
If we were able to eliminate this 17% faffing, for our own businesses, in a company that turns over £1m/year, the saving would be more than £150,000/year. To put it another way, this company would save £100,000 in seven months.
Aggregation of Marginal Gains
At the 2012 Olympics, Team GB stunned the world by taking seven out of 10 golds, the same as their performance in 2008.
How did they do it? For a long time, no one knew.
Then Dave Brailsford, the performance director, let the cat out of the bag: aggregation of marginal gains – or by improving lots of things a little bit.
The net effect was huge for Team GB.
Great for Team GB, but so what? The same principle of adding up small improvements applies to us in our lives: improve lots of systems a little bit, and the net benefit is significant.
Some benefits are additive, some multiplicative and exponential. The scope for improvement is huge, in every business.
Proof of the Pudding
We recently performed this exercise for an Oxford-based company; we reviewed their business, and we automated manual processes. The result? 29% improvement in their efficiency.
That’s nearly one third of their time.
As you can imagine, they’ve quickly recouped their investment in their new software. One extra benefit is that they can now expand, unhindered by restrictive and error-prone manual processes.
With a 29% improvement, if a company were making £1m a year, they would save £100,000 in four months, not seven!
£100,000 in four months, every four months. In 5 years, that’s just under £1.5 million.