One of the best ways to increase profits in 2014 is to increase automation of …. just about everything. And that which can’t be automated should pushed to the least expensive person or external resource who can do it well.
4 straightforward steps will take you a long way:
- Identify and calculate the total cost of each high volume and frequently repeated process in your business. Automation of things that are low volume and do not happen frequently are of secondary concern.
- Starting with the highest cost processes, determine if there is an automation solution, the investment required to execute it and calculate your annual savings and, even better, the net present value (NPV) of your future savings.
- For those projects where automation is feasible and financially attractive, move forward with automation as soon as possible – with the greatest savings projects first – to the extent that you have investment dollars available
- For those processes where further automation is neither possible or does not generate significant enough savings to justify an investment, explore alternative resources such as pushing the work to more junior employees and/or outsourcing to another organization.
Humans are not machines and there are limits to what we can and can’t do. But we can agree that delegating work from a $75/hour employee to a $30/hour employee makes sense if we don’t suffer a loss in quality and the total cost (hourly rate x hours) is significantly reduced. We’ve just freed up the more expensive person to tackle something that has a higher return for the business.
Automate. Delegate. Build Wealth!