Budgeting is hard work. Not only do you have to think about all of the expenses your business incurs over the year, you also have to tie those expenses to the revenue your business brings in each year. If your expenses are more than your revenue (or if you are just breaking even), you have a problem. While most businesses are not experiencing such extreme circumstances, many are feeling the effects of tight budgets and limited spending.
When you look at your company’s budget, what areas are costing your business more than expected? If your business is like most, operational costs are most likely high on the list. There are a variety of costs that go into the successful management of a business. From inventory and software to labor and workforce costs, operational costs can get out of control very quickly if you are not keeping an eye on them. However, even with a keen eye, operations can be some of the highest expenses your business incurs.
Time is Money. Do You Know How Much Operational Inefficiencies are Costing You?
Complicated, manual processes often lead to numerous inefficiencies throughout the organization, contributing to higher than normal operational costs. Complicated, time-consuming processes weigh heavily on your staff, bogging them down with daily tasks and taking their time away from strategic projects that lead to business growth. Over time, these complicated and often highly manual processes can add up, hindering your efficiency, impacting your bottom line, and impeding on your profits.
In order to eliminate the burden inefficiencies are having on your operations and your budget, you first need to be able to identify them. Business intelligence tools can help you identify the processes contributing to business inefficiencies and, with the implementation of KPIs, you can monitor and measure your performance as related to the efficiency goals you set. This enables your organization to become leaner and better able to compete in today’s competitive marketplace.
When you use business intelligence tools, you can answer the following questions about your business and its operational costs:
- How much are our current processes costing the business?
- What are the costs involved in fulfilling customer orders? Processing payroll? Managing inventory?
- How are inefficient processes impacting employee costs (salaries)?
- Which processes are associated with the high expenses impacting the bottom line? What is the effect on the business?
Business intelligence provides management with the information they need to begin the process of reducing the operational costs associated with complicated, inefficient and often manual processes. With business intelligence tools, companies can monitor their progress throughout the year and continually work to meet predetermined business goals. Many ERP solutions, such as Sage 100 ERP, come pre-built with business intelligence tools that can help you identify where your inefficiencies are taking place and how they are impacting your operational costs. By putting these tools to work, you can create a leaner budget and start seeing higher profit margins. Contact us today for tips on how to use business intelligence to improve your operational and budget goals.