The Hard and Soft Dollar Savings of Automation
In theory, making a case to automate your company shouldn’t require much justification at all. Businesses that automate are faster, leaner, and less susceptible to interruptions. Not only do they benefit by pleasing their customers and employees alike but they also save critical dollars that can be used to future-proof their businesses for years to come. If your main goal is to cut costs and gain a competitive advantage over other businesses in your industry, automation is the answer —and the hard and soft dollar savings ensure that your project generates the ROI you’ve been promised by your vendor.
Hard Dollar Savings
The first category is the hard dollar savings or increased revenue in the operating budget. Hard dollar savings are usually the result of having tangible and identifiable reductions in expenses. These savings include:
Lower Business Operating Costs
Automation drives down business costs by:
- Substituting electronic repositories for filing cabinets to eliminate long-term storage space
- Using workflow automation to easily manage high volumes of orders, receiving documents, and invoices
- Scanning, classifying, recognizing, validating, verifying and exporting data/images quickly, accurately, cost-effectively
- Providing built-in tools to help avoid late payment penalties, and capture higher percentages of discounts
- Reducing mailing, postage and shipping costs associated with document delivery, to and from customers or vendors
- Cutting labor expenses – slashing time for printing, copying, filing, and document research using unsearchable paper
- Lowering equipment expenses by reducing the need for printers and fax machines, and added maintenance cost
Better Utilization of Personnel
Another benefit of automation is the elimination of menial tasks. Employee productivity increases because they no longer must make copies of documents or look for lost or misplaced files.
It also reduces the need for employees to manually send documents to supervisors to approve expenses and purchase orders. Using automated workflow routing of documents eliminates management time and expenses to manually move documents from one department to the next. They can complete tasks right from their desktop.
Increased Cash Flow
It can also automatically prompt users to take advantage of vendor discounts, and to invoice earlier, faster, and more efficiently. The result is increased cash flow, which allows your company to invest capital in the things that matter most.
Soft Dollar Savings
The second type of cost justification revolves around soft dollar or intangible savings. Benefits are realized, but they may not easily translate as cost reductions.
Increased market share, higher employee retention, and the ability to bring products to market faster are examples of strategic benefits that tend to get ignored in hard-dollar ROI discussions.
Other soft dollar savings include:
Better Customer Service
Immediate access to automated documentation encourages better customer service. Companies that go paperless show improvement in overall customer satisfaction with products and services. Employees have fast access to information to meet customer requests in shorter timeframes.
“Green” Improvements
Environmental savings are realized by bringing a company paperless. According to the Environmental Paper Network, “If the United States cut its office paper use by roughly 10 percent or 540,000 tons, greenhouse gases would fall by 1.6 million tons. This is the equivalent of taking 280,000 cars off the road for a year.”
Eliminating the printing of multiple documents alone can dramatically cut carbon and energy costs. Lighting, heating, and cooling costs for print equipment are also significantly reduced.
Ready to find out how automated sales order processing can fit into your business? Contact IntelliChief to learn more, or to request a custom demo of our order to cash automation software, click here.
