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What Software Can do to Impact Profitability in Any Business
No matter what type of business you own, manage, or lead – whether it’s a B2B or B2C company, a private equity, M&A, or venture capital firm – software solutions can positively impact profitability by creating simplicity and efficiency in your business processes.
Business operations software allows you to organize, measure, and modify every component of your process with pinpoint accuracy so you can operate from a less reactive, more predictive strategy, reduce operating expenses, and improve customer experience (CX).
If you haven’t implemented software solutions in your business yet, if you have outdated systems, or you’re considering buying a business that has questionable business software, here’s a rundown of all the risks of not having the right software systems and how it impacts profitability.
A Walker study found that by the end of 2020, customer experience will overtake price and product as the key brand differentiation. To create a superior CX, you need to collect customer data and bring out valuable insights from that data with speed and precision. – Super Office
The Cost of Not Having Custom Business Software
It still surprises me when I consult with a business and there are countless manual processes in place and an array of different standards and tools. Often, these companies will have their executives running Excel or Google spreadsheets, inputting numbers for hours trying to get the outcomes they need. People in customer relations are hand calculating or writing orders on paper, or running to another department to ask questions that could be answered with the right software. The time wasted is immense and the customer experience is inferior, affecting profitability.
Is your PE, M&A, VC, B2B, or B2C company still using outdated processes and technology? Not operating with custom business software unique to your company and processes, or just as detrimental, using old, outdated software that puts you into technical debt, raises the cost of every outcome.
Many businesses feel, “if it’s not broken, don’t fix it,” and continue to operate with this philosophy, never knowing how much better their entire business process could be, how much time could be freed-up, and how much profit could be made by implementing newer technologies.
Yes, it can be costly to build custom software, but it pays for itself in the long run, starting on day one. The costs of not implementing business software specific to your processes are often not noticeable or tangible, especially when you’ve been doing things the same way for a long time, but in the end, they continue to compound and add up to high operating costs and a less-than-stellar CX, which hinders growth.
All of the following significantly impact profitability, but nobody realizes it:
- Old technology
- Cumbersome, outdated processes
- Repetitive manual tasks
- Unnecessary duplicated work
- Frustrated employees
- Inability to track or measure accurate KPIs
- Excessive inventory
- Extended receivables
- Missed opportunities
- Poor company culture
- Lack of scalability
- Inability to manage new products and services
- Customer frustration
- Stagnant business value
The costs of not having software to improve processes tend to be “soft costs” that are hard to measure, and the other consequences are subtle, but ultimately, each one chips away at customer satisfaction, which eats into your bottom line.
What Your Business Can do With Custom Business Software
Technology is a tool. We all use tools in our businesses – think about your calendar, computer, or phone system. Tools help us perform better, more efficiently, and get us through the day in an organized, simplified manner. Imagine if we had never adopted using the telephone? The same can be said of today’s technologies.
Software that simplifies and organizes business processes is another tool, but it’s a tool with a much higher payoff. It allows your organization to look forward, rather than doing business through the rearview mirror. It is a powerful instrument for growth.
What your company can do with the right software:
- Measure sales and marketing activities with complete accuracy
- Measure business unit activities
- Improve forecasting and budgeting
- Utilize dashboards to provide deeper insight into KPIs
- Reduce risk with deeper insight
- Increase internal communication/collaboration
- Eliminate repetitive, manual daily tasks
- Create reproducible business processes
- Reduce hours with streamlined, automated processes
- Capture processes in the technology
- Capture market differentiators in the technology
- Reduce tribal knowledge
- Improve company culture
- Boost employee job satisfaction
- Reduce training expenses
- Increase productivity
- Increase inventory turns
- Strengthen receivables collection
- Expand scalability
- Improve customer experience
- Ultimately … increase revenue!
In an MIT Sloan study of 400 global companies, IT investments had a positive effect on revenue growth; for example, a $1 increase in IT expenditures per employee was associated with a $12.22 increase in sales per employee.
How to Ensure the Benefits of Business Software Outweigh the Costs
When you finally take the leap into custom business software, it can be daunting. There are plenty of stories about failed attempts and money spent for nothing. However, when you partner with the right IT company that gets to know you and your company, your processes, and your CX needs, their team will provide the right solutions to your most pressing concerns.
Swip Systems, for example, does not promise our clients the world or tell them one software solution will “fix” everything. What we do is help them understand the benefits of the proposed system and determine which financial and business benefits can be realized.
As IT professionals and software developers, it is our responsibility to ensure your company receives the right custom software solutions for your needs and the best software for the value. One in which the benefits outweigh the cost of the system.
“Simplifying your business [with IT] requires that you define the business process that is most essential to the delivery of your customer value proposition, not to your most important product or service, but to your most important operational capability.” – Jeanne Ross, MIT Center for Information Systems Research
The Bottom Line …
Understanding the financial benefits of new custom software solutions or the integration of existing systems with the new provides great opportunities for growth. Everything that business software allows you to do internally all comes down to providing an exceptional customer experience, every time.
Ultimately, when customers are happy, you retain them, they tell others, and your bottom line increases, which improves the value of your business. Wouldn’t it be nice to:
- Reduce technical debt?
- Foster creativity and innovation?
- Achieve company-wide alignment?
- Reduce customer acquisition costs?
- Attain long-term, positive company culture?
- Improve customer experience and loyalty?
- Increase revenue?
- Escalate business value?
- Attract investors and potential buyers?
86% of buyers will pay more for a great customer experience. The more expensive the item, the more they are willing to pay. – PWC
If you’re ready to start brainstorming how custom software could increase your business’s efficiency, significantly improve CX, and grow revenue, let’s explore the possibilities together. Don’t let the assumed costs of developing software derail the investigative process. Swip Systems can help you brainstorm, identify the right opportunity, and move forward in a systematic way that eases the fear of the unknown. We love to help and offer no-obligation advice. Contact us today. 618.346.8014