How to Use Technology to Reduce Business Costs
Technology is increasingly evolving to improve efficiency and effectiveness in a wide range of industries. Notably, new technology solutions are providing businesses with accessible ways to reduce business costs and increase productivity.
The following examples outline just how many facets of business costs can be reduced with proper technology solutions.
Cloud-Based SaaS Solutions
The innovations brought to the business world by cloud-based software as a service (SaaS) solutions have been profound. It has provided greater flexibility, faster upgrades, and, most powerfully, lower operations cost.
A cloud-based SaaS solution provides access to software, systems, and data storage without having to store or own any of the hardware or software in-house. This provides cost savings on multiple levels, including:
- Hardware. There is the upfront cost of owning the proper hardware to house data storage and security systems on-site of your business. This can be cost-prohibitive for many small businesses.
- Storage. In addition to purchasing any hardware or software upfront, you will have the continual cost of storing the systems. This means you have to have a bigger building (higher rent or mortgage) and provide climate-controlled facilities.
- Security. Included in the cost of housing systems is keeping those items secured. There is physical security necessary, plus IT and cybersecurity, that requires staff with a specialized skill set.
- Staffing. The hardware and software have to be maintained, updated, and secured. You will need to have a technical team to maintain the systems and software, security experts to protect sensitive data, and staff to physically maintain the area (janitorial, management, etc.).
- Upgrades/Updates. All hardware, software, and systems need periodic updates to maintain optimal function and security. SaaS offers greater flexibility to make updates to software quickly. Since the SaaS provider is dedicated to continually improving their services, you don’t have to pay staff to stay educated and maintain the software’s compliance. Plus, you are removed from having to bring in expensive consulting firms to perform complex upgrades. The SaaS provider can shoulder those expenses because it is distributed across multiple clients.
AI-Based Analytics and Data Processing Tools
Similar to how SaaS can provide cost savings by removing the need for internal hardware and staff, artificial intelligence (AI) can do the same for analytics and data processing.
Here is how allowing AI to take over specific tasks, like analytics and data processing, can save businesses money:
- Shift Labor to High-Value Work. The goal of AI isn’t to eliminate human workers, but rather to eliminate the time spent on tasks that AI can do – and often do better. This frees up workers, and financial resources, to focus on high-level tasks where humans thrive.
- Reduce Paperwork
- Expand Speed & Resources. Humans have reached our maximal potential in a lot of areas. We have limited capacity for hours to work, speed of performance, and a finite amount of resources to pool from. AI doesn’t have many of the human restrictions – like needing to sleep or eat — and can process information quicker. For example, one report showed that electronic document discovery could locate 95% of relevant documents in the discovery phase of legal cases, compared to 50% in human workers.
- Improve Customer Experience. The use of AI in customer service has evolved tremendously. With self-learning technology, basic customer service questions can be answered immediately. This saves the costs of needing 24/7 live representatives and also improves the customer experience, which could lead to revenue increases in the long-term.
Dovetailing from AI into automation is a smooth transition. AI technology and automation can work collaboratively to reduce human labor hours and costs.
According to WorkMarket’s 2020 In(Sight) Report, automation can save employees as much as six full weeks of time and leadership a full nine weeks of time every year. Those resources can then be allocated to more lucrative or innovative endeavors.
To give a financial perspective to this, using data on the average employee wages at a Fortune 500 firm, introducing automation could save approximately $4.7M a year for a business at this level.
Beyond the covered benefits of technology for saving labor costs, technology has made significant advances in asset management as well.
Modern tech solutions have evolved to improve asset management that helps minimize warehouse costs and reduce equipment maintenance costs.
Some examples of technology reducing costs in asset management include:
- IoT-Powered Telematics for Fleet Management. Telematics allows businesses to track their fleet in real time with reporting on fuel consumption, location, speed of route, and much more. Insurance companies are adopting telematics to manage their customers and identify risky drivers and assign fault in accidents.
- IIoT-Driven Asset-as-a-Service, Predictive Analytics, and Prescriptive Maintenance in Manufacturing. The Industrial Internet of Things (IIoT) is increasingly being used for preventative maintenance (a big cost-saver overall) and even expanding into new business opportunities for firms in asset-as-a-service.
- Voice-Directed Warehouse Operations. Voice-activated technology is making big strides in improving the efficiency of warehouse operations. Shortly, employees may no longer need RFID scanning to locate warehouse items. Instead, they will be able to communicate with a Bluetooth headset that guides them with specific directions to the item.
- Drones in Asset Management. What seemed to have started off as a hobby technology has now evolved into an efficiency technology. Drones are increasingly being used to eliminate the need for employees to scan and assess the health of assets. With drone technology, everything could potentially be completed remotely.
- Supplier Management. Companies now have the ability to track their suppliers from just one consolidated dashboard as a tool for their supplier management tasks. All of the information they can ever need from a single supplier is uploaded on the database. This helps them make quick decisions when it comes to their suppliers. They can make snap judgments as to whether they should pull out or not of a deal.
The advancement in tech has helped businesses to reduce many essential operational costs. This, in turn, not only enables businesses to reinvest the money they have saved but also to direct their staff to more productive and meaningful work.
Finding the right solution for your business is a worthy investment that will save you money, improve efficiency and productivity, and give you a much-necessary edge to compete on today’s market.
- How to Use Technology to Reduce Business Costs - August 26, 2020