Companies can realise massive savings through error-reducing ADC technology

Automated data capture (ADC) systems have been successfully saving companies millions every year on reduced operating costs. And today, the technology has become affordable enough that every small to medium business (SMB) with time-consuming manual data entry procedures can afford to deploy these efficiency-enhancing tools, and begin to enjoy more error-free transactions and the associated savings and benefits associated with automation.

In fact the return on investment (ROI) for smaller companies implementing ADC systems is in most instances very rapid, with the organisation being able to enjoy both hard and soft benefits. Many errors in day-to-day operations like order shipping, inventory management and sales processes which are ordinarily overlooked as simple "operational expenses" can be costly, but these erroneous expenses can be all but eliminated through the deployment of ADC.

"Justifying the cost of implementing a solution which automates your data capture is relatively easy if you select the right tools, and the results speak for themselves. However it is important for the ADC proposal to be well structured and the various savings to be quantified wherever possible, or at least referred to in the proposal for modern ROI-obsessed businesses to invest in a new IT solution," says Tiaan Grobbelaar, General Manager at Epicor Scala Africa.

When calculating the costs of errors currently being overlooked or simply accepted by the organisation, it is important that those transactions which are often seen as "part of the business" also form part of the cost formula. These types of errors, such as a mistake in shipping, for instance, always cost more than they might appear to at a casual glance and if they occur frequently, improved accuracy will immediately add up to substantial savings over a financial year.

"An ADC proposal has traditionally focused on the purest form of cost-saving as it promises a reduction in labour costs. However, continuing with the inaccurate shipment example, automation would in this case also save labour costs on the call centre which will have to receive and resolve the customer's call," states Grobbelaar. "Warehouse staff costs as the missing item needs to be repacked from stock will reduce, and a second shipment charge as the item is hastily sent out to the customer could be avoided, and the automated environment would yield softer benefits such as that customer's increased satisfaction had they received the full complement of goods order the first time."

Although any frequently inaccurate process or task requiring manual data input can benefit from ADC, upon first proposal the system ought to resolve the areas of highest customer pain. That is, those aspects of the customer's business most able to benefit from automated processes. Usually warehousing is an ideal starting point and in most cases the accuracy of warehousing operations can be improved to in excess of 99%.

The exact cash-value amounts saved by building an ADC-based warehousing solution must be calculated on a per-customer basis, but in most cases a more efficient system will save millions of rands in physical warehouse costs and associated levies. In addition, it will generate more cash flow by freeing up the capital invested in safety stock, and even save on the interest of this capital and the obvious labour costs. More shipments can be handled by a smaller workforce, providing the customer with an opportunity to grow its operations without expanding the staff count.

Soft benefits may be harder to quantify, but they can also deliver some of the most attractive advantages of an automated solution. Calculating the value of customers lost due to processing errors will often yield astounding values; however, be cautious when quantifying this added value to not overstate it and engender unreasonable expectations as a result.

As is the norm today, real productivity gains and cost savings which will have a direct impact on the bottom line of the business are the keys to successfully justifying any new technology investments. Examining the value of reducing errors through ADC has revealed this technology to be one of the easiest to successfully implement, with an extremely rapid ROI for business of every size.

"After quantifying the far-reaching cost of errors and demonstrating how these costs can be eliminated through automation, most companies conclude that they can no longer afford to conduct 'business as usual'. ADC is rapidly becoming an essential technology for any business interested in operating at its most efficient, so contact Epicor Scala at info@scala.co.za for further guidance and exact details on assisting your organisation's bottom line - how to demonstrate these savings before implementation and how ADC will deliver these sought-after advantages in strategic deployments," ends Grobbelaar.