Efficient and successful enterprises are often share similar characteristics; leadership, a useful value proposition and ethical practices, to name a few.
Efficient organizations typically recognize the importance of investing in innovative technologies to automate business processes. Developing a business case, calculating the time and cost of labor in executing critical processes, and evaluating the outcome against the financial outlay to systematize processes, results in identifying a break-even point. That break-even point frequently helps an organization decide between in-house automation, or outsourcing to experts. Expect redundancy elimination and agility to prevail, in either case.
Recent years have seen the practice of empowering staff drive immense benefits for organizations. Why micromanage process execution when, by trusting employees to make the right business decision and successfully accomplish their assigned responsibilities, rewards are reaped by all. Employees profit from independence, initiative and self-improvement. Management realizes value from increased employee motivation and satisfaction, swift problem resolution, and extra time to further focus on the business.
Economies of scale weigh in, too.
From a financial perspective, leveraging economies of scale for efficiency ranks noticeably worldwide; whether companies function as a product-producing or a services-delivery organization.
First, a definition.
According to the Forbes investment education site, Investopedia , “economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because of the inverse relationship between the quantity produced and per-unit fixed costs; i.e. the greater the quantity of a good produced, the lower the per-unit fixed cost because these costs are shared over a larger number of goods. Economies of scale may also reduce variable costs per unit because of operational efficiencies and synergies.”
Taking hold, perhaps most noticeably, in the early 20th century with Henry Ford’s assembly line technique, economies of scale quickly demonstrated that amortizing your fixed cost over larger production runs, ultimately reduced the average cost per unit.
The same strategy holds true for sourcing and procurement.
Both suppliers and buyers benefit from economies of scale through aggregated spend sourcing. There is plenty of bargaining power with greater volumes of spend with a single supplier. Aggregating spend encourages flexibility with a supplier since suppliers prefer to retain business. The supplier can, in turn, negotiate better rates with his / her suppliers. Eventually, a close business relationship ensues, which is mutually beneficial to both buyers and suppliers
Similarly, aggregating volumes of transactions can reduce cost.
High volume, high velocity transaction processing –aggregately performed on a single, innovative technology platform – can yield dividends as well. Outsourcing organizations performing transaction processing functions on behalf of their clients regularly deliver reduced transactional costs, thereby impacting the bottom line.
At SDI, we continually ensure we are positioned to apply best-in-class business process and system performance for our clients. We encourage you to leverage our organization to service yours.