by Andrew Harwood
Profit leaks within organisations across the UK are proving a huge cause for concern. Many organisations don’t have the visibility to identify inefficiencies within their operations, despite the fact there are significant savings to be made for those who can “plug the leaks”.
We define “profit leaks” as any inefficiencies that increase costs or impact on sales or margins. These losses can manifest themselves as anything from overspending and poor procurement procedures to missed sales opportunities.
The key to remedy or prevent profit leaks is having relevant, detailed and specific information available in a timely manner. Reporting should be the main focus of review and improvement. When compared to what measures ‘could’ put in place to prevent profit leaks, better reporting tools, alongside greater visibility across the organisation are significant measures.
Understanding just how critical reporting and visibility of data is to an organisation is critical and by having access to accurate and timely information provides a better understanding of where opportunities are being lost. If you have transparent reporting on staff utilisation, sales procedures, billing/cash flow, project profitability or stock availability, then you have a benchmark to make improvements. You can’t manage what you can’t measure.
Business management solutions and technologies can play an immense role in addressing such issues, while it does involve implementing new ways of working, the benefits of creating workflows that help stem the tide of profit loss through effective savings measures as well as highlighting additional profit opportunities. Providing increased transparency, employees across the business are also empowered to make more efficient use of resource, ranging from their individual time to cost control. In effect, everyone has a part to play in the success of the business.
Having access to real-time information and analysis can also help to spot interesting trends, which could be the source of additional opportunities. Not only will this help to have a positive impact on the bottom line, but organisations will be able to provide a more efficient and valuable service to customers too. What’s more, these long-term benefits can be measured. Through integrated, business management solutions organisations can be assured the improved visibility will successfully reduce losses and increase profits, providing the stability they need to survive in any economic climate and enjoy a prosperous future.