As 2024 continues on, many business leaders are looking for ways to remain resilient due to economic uncertainties. According to recent SAS data, 97% of executives view resiliency as an important factor—and 87% are confident about increasing resiliency in their companies in the future. Part of their efforts to increase the sustainability and buoyancy of their organizations may be to trim expenses; incorporating best-fit technology and applicable automation strategies into your day-to-day can open up cost management opportunities and support process optimization.
Here, we provide tips for using technology and automation with discretion. It’s critical to ensure these tools bolster your revenue and reduce expenses—not the other way around.
Why Cost Management Is Important Now More Than Ever
With the growth of the tech sector and the plethora of tools aimed at supporting business services, it’s more important than ever to be intentional with your IT budget. Of course, there are plenty of technological solutions that make it simpler for businesses to meet evolving demands. However, given current economic pressures on the business landscape, overall spending may be reduced or capped. So far, the US has managed to evade a recession—but with looming uncertainty has many leaders looking at reallocating budgets with more efficient intentions, targeting tools that support cost management strategies.
Cost management entails both retrospective analysis of spending data and preparing for the future. By practicing effective cost management strategies regarding new technologies, you can invest in tools that increase your operational efficiency without IT spending spiraling out of control.
This is especially pertinent given the rising costs of software and cloud-based services. For context, a report by Gartner reflects that most businesses overspend on cloud services by 70%. That’s a significant amount of wasted resources. It pays to be pickier when it comes to business services. To increase your business’s resiliency, be more judicious in the allocation of resources in AI, cloud, mobile, and telecom technologies.
Harnessing Technology to Manage Costs
Effective cost management doesn’t just mean cutting expenses. Employing the right technology allows you to increase the efficiency of your systems and processes and see savings in other areas. By using available tech more effectively, you can bolster efficiency in your business practices. AI and cloud-based tools are two major recent innovations that have opened the door for more conservative money management by optimizing business operations.
Cloud-based software offers many benefits that likely come as no surprise. When used effectively, cloud-based tools can offer security, flexibility, and mobility. Easy access to data and project management tools can translate into cost savings for your company; however, this relies on the proper management of cloud space.
Organizations often incur unnecessary expenses by paying for unused space or storing nonessential data. Use cloud elasticity to your advantage, and only pay for the storage that meets the demand of your company.
The broad range of AI tools has proved invaluable in reducing spending and generating revenue for many businesses. In certain capacities, these tools can do tasks more efficiently and to a greater result than humans. For example, AI models excel in efficient data analysis, uncovering trends that may elude human observation. They also shine the realm of customer service. AI-powered chatbots can adeptly handle routine inquiries such as setting appointments, generating and nurturing leads, and more straightforward customer service requests, freeing human agents to address more complex issues.
Leveraging these technologies can not only optimize business operations but also position organizations to navigate cost challenges judiciously, fostering resilience for the business services industry. This supplementary tech also primes businesses to scale upwards with time, offloading more repetitive activities so the core team can channel its energy on growth.
Automation Strategies to Maximize Cost Management
The key to cost management often comes down to automation. Both cloud-based tools and AI can be used to automate routine business practices; this approach directly addresses inefficiencies within business operations and maximizes cost management efforts.
How do these cost management strategies play out for your company? When used correctly, automation can help address common business challenges like efficiently collecting payments or paying supplier invoices. Delays in these processes not only take up human time and company resources but also slow down your organization's cash flow.
Let’s look at some operations across departments that are ripe for automation—to support a comprehensive cost management strategy.
HR Processes
Automation tools can be used to support HR throughout the hiring process, from recruitment to onboarding. By implementing a human resources management system (HRMS), you can automate candidate management, allowing representatives to better attend to employee relations and manage benefits.
Marketing Automation
Your marketing department can benefit from a range of streamlining tools. Marketing automation software can organize leads and enhance the efficiency of email campaigns by sending curated responses based on user actions. You can further use automation tools to filter and prioritize leads, optimizing the sales funnel for a more targeted approach.
Look for marketing tools that are cloud-based, facilitate collaborative work, and centralize resources in order to run the tightest ship possible.
Meeting and Email Organization
Setting up meetings and sifting through emails are two tasks that take up hours of each work week. But calendar automation tools that schedule meetings based on availability and manage pre- and post-meeting logistics can save substantial time and resources for your staff and customers.
Along a similar line, email automation tools can segregate an avalanche of emails into specific folders, keeping pertinent conversations at the top of the inbox. Such automated inboxes can help employees prioritize and focus on the most relevant threads.
Payment Automation Services
Payment automation services let businesses make payments and process financial transactions via ACH transfer, virtual card, wire payments, and more. This seamless process facilitates the transfer of funds without any manual intervention. For example, businesses can automate recurring payments like salaries, supplier invoices, or regular utility bills. Like all automation tools, this increases operational efficiency and can reduce labor expenses.
By eliminating the need for manual data entry and payments, automated systems not only enhance financial reporting capabilities, but also curtail errors. The ripple effect is felt in direct cost savings related to transaction fees and indirect cost reductions stemming from decreased financial delays, error corrections, and manual processing.
Automation Can Be Your Ticket to a Leaner, Optimized Business Operation
The business services industry is going through a tech-driven metamorphosis. Even though new software may look appealing at first glance, you want to ensure that your IT spending doesn’t sacrifice an effective cost management strategy. However, many cloud-based and AI tools can support increased efficiency for your business. Automating processes like routine payments, HR processes, and marketing services can cut costs and free up resources for your organization’s priorities. It’s all about knowing where automation can serve your team best.
A reliable financial partner with a keen eye for identifying opportunities to create balance sheet efficiencies can make all the difference in your success. Connect with us at First Bank & Trust, a division of HTLF Bank to find a strategic ally.
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