Technology Productivity Leaks Secretly Drain Profits

by Mark Benvegnu
Technology Productivity Leaks Secretly Drain Profits

Are there silent technology leaks lurking in your business and costing you money?

While it’s easy to identify secret profit drains in some businesses – for instance, shoplifting in a retail environment – technology profit leaks are not always so obvious. Ironically, many of these stem from a desire to manage costs, but in actuality are short-sighted and counterproductive.

Fortunately, if you know what to look for, these insidious technology profit leaks can be shut off for good. Here are a few of the most common ones, and some handy examples to compare to your operations to help you see just how much profit is going down the drain.

1. Manually entering the same data into multiple systems.

Entering identical data more than once is a classic example of duplicating effort – it wastes time and money and exponentially increases the odds of inaccurate or duplicated data. Sometimes these misguided workflows are rationalized with the idea that hiring people to enter data manually is cheaper than building systems capable of supporting an “enter-once-and-share” approach. See the table below for a common scenario:

Number of systems where data is stored3
How often is data entered (number of sessions per week)?2
Hours of data entry per session2
Hourly wage of data entry person$20
Total cost per week$240
Total yearly cost$12,480 per year

2. Correcting or Checking Data on Multiple Systems

Maintaining multiple sets of data is inefficient and costly. Do you have people who are checking data across multiple systems? How many hours a week are sucked up by this redundant activity? The table below provides a good example of this common leak:

Number of systems where data is stored3
How often data must be checked (no. of sessions)2
Hours of analysis per session2
Hourly wage of analyst$30
Hours of data re-entry per week2
Hourly wage of data entry person$20
Total Cost Per Week$400 per week
Total Yearly Cost$10,8 per year

3. Using An Off-The-Shelf Software Utility

Sometimes it’s tempting to use a software utility that you already have – or your people are used to. But this approach is short-sighted and costs big money over time.  If you have to hire an extra person to make up for an inadequate software utility or adopt an inefficient workflow to compensate for “off-the-shelf” shortcomings, that’s a profit leak.  This table provides a representative scenario:

Monthly cost of utility / SaaS$400
Average hours spent working through “less-than-optimal” workflows5
Hourly wage of manager/analyst$30
Total cost per week$250
Total yearly cost$13,000 per year

4. Typical Cost of an ETL Project

The optimal way to plug profit-draining technology leaks begins with taking a fresh look at your processes, systems, and datasets. Sometimes it’s hard to see the forest for the trees, or maybe employees or departments are stubbornly entrenched in doing things the “same old way”.

An expert in custom software development, like Pell Software, well-versed in the newest technologies and techniques can work with you to analyze your systems, processes, and workflows to purge profit-draining technology leaks. See the table below for an example project and associated costs:

Average hourly rate of development$115
Number of data sources3
Average hours per data source40
Average cost for an automated solution$13,800
Cost after 5 yearsManual: $64,000 ($12,800 x 5) Automated: $13,800
Savings after 5 years$50,200
Return on Investment363%

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