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Cost-saving strategies: Automate clerical processes

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:DescriptionAutomate 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.
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Written by Michael Sisco on

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:

Description
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
Task:

  • 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

Quantify: 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
    b. Training
    c. Administrative
    d. Supplies
    e. Other

Investment: Typically programming or process control equipment and implementation costs

Tips:

  • 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.
TechRepublic originally published this article on 10 November 2003.



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