That statement probably just cheesed a whole lot of you off
and the sad part is that it is 100% true. Last week, we told you why you shouldn't use Excel. Today we are going to bring it home in terms of dollars and cents. Here is what you are doing now: you get some kind of information over
email from someone in your organization.
You do a little number crunching in Excel and attach the spreadsheet to an
email that you then send to accounting.
In accounting, the spreadsheet is opened, maybe some more number
crunching goes on, the data gets entered into QuickBooks and maybe a check is issued or a report generated. Sound
about right? This is absolutely wrong,
and it’s not just the top three offenders here, it is every separate
application you type anything into. We can eliminate the cost of all these steps through automation and free your employees to think and innovate instead of typing into spreadsheets, et al.
Don’t feel badly, that’s the way everyone, from Bank of
America on down, does it. There is a better way. What if the person who generated the data
originally could type it into a custom built application that does exactly what
you do, for you? Let’s take an
example. You have a guy on the loading
dock receiving shipments. Usually, s/he
will count the number of boxes and sign a bill of lading and hand carry a copy
to Accounts Payable who types the items in to QuickBooks then issues a check. What if, instead,
the guy/girl at the loading dock, scanned each box as it came in and this
hypothetical piece of software recorded it, counted it, added it to inventory
and issued a check to pay for it and put it in the ledger all in one fell swoop? What if the warehouse person scanned the box
and the barcode at some location in the warehouse where the box is going to live until the
contents are needed? Then you know where
the box is, what and how many it contains, how long it has been there and what
it has cost you to warehouse it, since you know how many cubic feet are in the
warehouse, what the fixed and variable costs for it are and the size of the
box. You just eliminated all the
overhead in your company that doesn’t actually move the ball forward AND gained valuable insights into cash and inventory flow.
We already told you that everyone runs a company the former
way and not the latter. Many of you are
too young to remember Braniff, so we’ll use a more recent example (and we’ll also
discount the financial sector since they are not too bright (how to you have
billions in assets and go bankrupt? (the question is rhetorical, I know what
happened (and they are still idiots (and I know you love my nested
parentheticals)))) and the energy sector since they financial sector took them
down in 2008 (…and Enron cooked the books)).
USAir filed one of the largest bankruptcies in history for the same
reason Braniff did: they don’t know how much it costs to fly you from Point A
to Point B. Substitute Chrysler.
Substitute Worldcom. We use USAir because
what they do is more of a commodity. So
if they don’t know how much it costs to fly you where you want to go, and
someone else has a sale and can do it cheaper and the brass at USAir thinks
that nobody can do it better, they price their service lower, and less than it can be provided for, and
I tell you the USAir story for one
reason. If they used a system like the
one I can build for you, they wouldn’t have failed. They would know that it takes X number of
pounds of kerosene for your particular trip and that the kerosene going into
that airframe was bought for Y dollars per pound and the airframe itself can be
amortized over Z years at a cost of W per year and the pilot makes V dollars
per flight and the attendant makes U dollars per hour and the maintenance is Q
dollars per month (they don’t wait for parts to fail, when they get so many
hours they replace them (you can’t just pull over on the side of the sky) and
on and on ad nauseum. The point is, it is
calculable, and they could have done it and didn’t, they depended on
YOU, dear reader, to bail them out. So if they knew how to calculate the cost
of your trip, they could add whatever profit they deem appropriate and go about
their business. When American or Delta
offers a sale that is less than the cost of providing the service, you can
laugh up your sleeve and let them. Then you can watch Delta and American go file bankruptcy.
Notice how we switched from USAir
to you? Yes this all applies to
you. Whether you are a roofer or an
accountant or Brian Moynihan (of Bank of America) if you are emailing
spreadsheets, or even have separate applications for HR, Accounting,
Warehousing, Project/Process Management,
you are missing the boat. You need one
application to rule them all so that when the product hits the dock, the check
gets printed (or ACHed, whichever). Or
when you make a sale, the proceeds go directly into accounting, no typing, and therefore no people required. People are expensive and they make mistakes. Software is comparatively free and doesn't need to type. If you have this kind of application in place
you can automate everything but the actual hammering of nails and selling of
houses (or building and selling Chryslers (they automate a lot of the production
too) or flying people around the country).
…and you can automate a lot of the marketing as well.
So yes, Virginia, there is a Santa
Claus. If nobody else is doing business
this way, and you can, you should. …and
put your competitors out of business. If
you go to one of our sister company’s website http://sentiahealth.com
we will explain how we automated the entire health insurance industry. That will save the American health insurance
consumer about 1/3 of their bill. Not $300,
$200. Not $1200 for your family,
$800. Collectively, we will save you
(all) one trillion dollars.
We have done the same for several companies, and we can do it for yours.