Reckoning System Costs as an Investment, Not an Expense
Success has a lot to do with attitude. For the small or medium-sized business enterprise, creating and maintaining a computerized information system, with all its attendant servers, workstations, networking equipment, operating systems, software programming and security protection, is never going to be a cheap proposition. But your attitude toward information system expenditures, whether you see them as an investment to be maximized, or as an expense to be minimized, can make all the difference in the world to your success.
Unfortunately, some company owners perceive their computer-related expenses as a necessarily evil — like a tax — that does nothing but reduce their bottom line profit. So they lay out the minimum amount of money needed to get the job of the moment done. For business managers with this mindset, usually these expenditures are in response to some sort of crisis such as a server crash. However the “savings” these frugal folks realize are deceptive and temporary at best.
Companies with an “expense” mindset toward information systems often don’t realize that every dollar they are “saving” in systems expense may be costing them three to five dollars in salaries. Every systems shortcut costs your employees time by forcing them to perform a manual “work-around” — not just once, but many times every day, day in and day out. The reason that this lousy trade-off is so commonplace is that payroll expenses don’t stand out as being exceptional when folks are reviewing the P & L, and it is not obvious that excess payroll costs are a direct result of systems shortcuts.
Another reality that often goes unnoticed, is that effective information systems not only impact the bottom line by reducing payroll costs, but can increase your top line by making your revenue generating employees more productive and by making your customers happier. Most successful entrepreneurs understand that their business isn’t a “zero sum game”. They realize that their decisions impact both revenues and expenses, and that productive employees and satisfied customers translates to increased market share (and sometimes an increased market) as well as increased profitability. Obviously efficient systems are not the only ingredient in a healthy, sustainable business; but they are an essential one.
Efficiency Partners customers deliberately invest in their information systems, because they’ve seen the payback firsthand. One nice aspect of investments in systems and processes is that business process improvements pay dividends not only in the short-term, but over and over again for the foreseeable future. Efficiency Partners’ Crescendo business process software tools don’t wear out or depreciate like investments in physical equipment, or even like software programs created by some vendors and targeted for “planned obsolescence”. The Crescendo software has been on a track of slow and steady improvement for over twenty years. Though their experience is sadly rare, our customers have never been forced to scrap their systems and reinvest.
If you’re ready to consider establishing a permanent systems foundation for your growing business that will allow you to invest in continuous business improvements, contact Efficiency Partners at 518-874-0616 to set up an initial consultation without cost or obligation.