During the past year, the price of crude oil has reached an all time high of approximately $135/barrel. Thankfully, the record high Canada dollar has helped us off set some of this increase; however we are now seeing the negative impact of higher oil prices.
From the cost of filling up your tank to the cost of shipping goods—the record price of oil is impacting everyone in the Economy. Based on 12 years of Technology experience, let's explore how you can control costs in the face of rising energy prices.
For white collar roles such as marketing, finance, operations and customer service—there are an array of technology solutions that will save you money. In the case of call centres based organizations—thousands of employees drive to work unnecessarily. In the case of Pizza Pizza, they have implemented a virtual call centre where agents take calls from their homes.
The technology behind the scenes that makes this happy is readily available from Cisco Systems, IBM and HP. In simple terms, when you call the Pizza Pizza number, the call is routed through a call processor which then forwards it to the next available agent. From the consumer point of view, this is seamless and obviously works due to the success of Pizza Pizza.
Similar technology could be implemented for front line staff such as agents, customer services reps and 1-800 number employees. According to industry think tank, Garner Group - such virtual call centre arrangements can save an organization as much as $2.25 per call. Multiple this by thousands of calls per day over the course of the year and we are looking at significant savings. In the face of higher gas prices, consider implementing mobile call centers or enabling access to your network remotely.
There has been some controversy surrounding the issue of encouraging employees to work from home. A recent study by the ICT Intensity Study indicates that productivity for home based employees could improve by as much as 50 per cent. There are many psychological reasons for this; however as a business manager there are clearly financial benefits as well.
Consider what is required for a company to provide a desk, chair, PC, phone for an office employee. Office furniture, computers, hydro, heating and building maintenance costs are all part of the equation. A mobile worker from home could eliminate the need for these components. In the case of a local firm in West Toronto, they realized cost savings in the range of $200,000 by implementing work from home programs.
A small business owner may ask, "how can I afford to buy and maintain this technology?" The answer is, "do not buy or maintain this technology at all—outsource it". Service Providers such as Pragmatic Management Solutions in Toronto provide hosted services where they manage technology for a monthly fee. A mid sized firm may look at this outsourcing model as cost saver as well. Factor in the cost of electricity to run servers, manage information and hiring high skilled IT Resource—and the outsourcing model does make sense.
Email, Phone systems, Networks and Web Sites can all be outsourced, lowering your costs over the course of 3-5 years. Outsourcing Information Technology is another way to control costs in the face of higher energy prices. The outsourcing does not have to stop there. Any business process that is not central to your organization is a candidate for outsourcing such as Corporate Social Responsibility, Training and Payroll.
Also consider eliminating paper based invoicing, statements and documents within your organization. Many organizations are issuing paper based invoices to their clients on a monthly basis. Once you factor in the cost of postage, buying envelopes, paper, paying mail processing staff—the costs of sending these invoices to your clients escalates. Now consider an electronic method of sending these invoices to your client in a secure, reliable fashion.
Today, Canada Post is pushing this technology via its ePost platform. ePost acts as an electronic delivery channel for documents, statements and invoices for hundreds of mailers in Canada. When visiting the ePost website you will notice that organizations such as Rogers, Toronto Hydro, City of Toronto, Bank of Montreal and Citi Financial are using ePost to deliver statements. The average cost of postage for a company is 52 cents according to the Canada Post website. For a portion of ePost mailers, the cost of sending the identical document electronically is 42 Cents according to Vic Klassen, Director of Multi-Channel Sales at Canada Post. 10 cents per invoice multiplied by 100,000 invoices over the course of year is a significant cost savings.
Your organization may be running older technology that is still heavily depending on paper. In that case, it is recommended that you work with a software development provider such as Tezuma Inc, located in Mississauga. The investment in upgrading core business applications that can produce electronic output will put your company in a position to realize significant cost savings. Combine their ability to modernize your business applications with an outsourcing model, and your business could be looking a large cost savings.
There is little that we can do about the rapid acceleration of energy prices. However, by looking at ways to reduce travel expenses, reducing the use of paper and outsourcing tasks that are not core to your business – you can at least control costs to remain profitable.
Radcliffe Dockery of HigherEye Training & Consulting is a Keynote Speaker and Consultant delivering skills training and consulting for organizations looking to compete in Diverse Markets at home and abroad. To learn more about how to reduce costs via outsourcing and technology, contact him at (416) 855-0072 or vision@highereye.com
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