Rather than looking at cost-saving opportunities only within the IT department, the IT manager can use technology to facilitate cost savings throughout the company. Here's one way:
Automate clerical tasks and processes in order to reduce the number of employees required to do a certain job, or provide the capability for existing staff to handle more.
Type of cost savings: Indirect
- Identify large groups of clerical workers in your company.
- Quantify the tasks or processes that can be automated.
Examples of areas with automation potential:
- Repetitive tasks in manufacturing processes
- Billing and collection
- Accounts payable
- Data entry processes
- Registration applications
- Paperwork filing and retrieval operations
- Legal files
- Medical records
- Payroll and HR
- Order entry and inventory control processes
- Data interface opportunities between business applications
Medical billing departments and other industry billing departments that run manually and process paper claims can cost the company 5-7 percent of revenue or more. Automating the clerical billing and collection processes can reduce the cost to 1-3 percent of revenue—quite an impact.
Likewise, the order entry, purchasing, and accounts payable processes, as well as the paper flow activities between a retail organization and its vendors, has significant savings opportunities by automating much of the process. To estimate your cost savings opportunity, follow these steps:
- Define the automation initiative
- Estimate the reduced headcount potential
- Calculate the potential savings:
# of eliminated employees x annual salary _________
# eliminated employees x benefits factor _________
Employee related expenses:
a. Recruiting and hiring
Typically programming or process control equipment and implementation costs
TechRepublic originally published this article on 10 November 2003.
- Gain support from department head, CEO, CFO, and key managers.
- Work as a team. IT role is facilitator, not "driver."
- Formalize project initiative.
- Track milestones and results giving credit to appropriate department.