Bill Todd, Business Development Manager at WiseTech Global, describes the balancing act many companies perform when considering new technology.
Making a change isn’t easy. You probably know you need to move from paper-based or aging systems for your business to survive and thrive in the future. Whether they’re major disasters, persistent client pressures, or even organizational changes within your business, forces inside or outside your business may be all it takes to move you toward change. More often than not, the tipping points are simply realizations you make about all the good change can bring your business. Here’s five examples.
#1: The Staff You Have Now Won’t Cost You Extra Later
I rarely hear anything about wanting a new system to reduce staff. In the labor-intensive logistics sector, three-quarters of monthly costs are employee-related. Usually, when staff hear rumors of new systems in development (or already available), they get nervous about holding onto their jobs. That’s when they need reassurance that the goal is simply to handle more throughput and dramatically improve the bottom line, all while keeping the same head count.
They have nothing to fear. In fact, they have everything to look forward to. From your perspective, it’s about holding onto talent: the valued people who hold your corporate knowledge, in whom you’ve invested.
In an average Customs House Broker, for example, each person handles about 50 brokerage files per month. Winning a new import account comes with 100 extra files and the need to hire one to two additional employees to handle the workload. The cost of these new hires could take about 70 percent of the revenue derived from the expanded file count. With an automated process in place, you will need only a part-time position, or even cover the jobs with existing staff, ultimately increasing the profitability of new business dramatically.
#2: A Lower-Maintenance System Won’t Cut IT Resources, Just Refocus Them
In larger organizations, the IT department that is currently responsible for building and maintaining aging applications naturally looks to protect its turf.
But that’s a slanted perception. What it really means is corporate knowledge can be redistributed, allowing the IT team to focus on the dynamic and increasing needs of end clients – on the evolving EDI requirements and customer interfaces that secure their loyalty – rather than internal hardware issues.
#3: What Clients Demand Can Overwhelm What You Can Supply
Many organizations are being pushed to the tipping point by clients who want to be provided with more information. Clients aren’t asking any more whether you can do the work. What determines whether they select you as their freight forwarder or broker is the level of visibility they’ll have into their shipments, your reporting capabilities and the responsiveness of self-service features. It also has an impact on whether you keep them when contract reviews come around.
With the latest systems, you can customize your service offering without cutting into your profitability. Whether they want self-service or personal contact, all the accurate data is readily available, delivered at the press of a button or automatically scheduled.
#4: You Can’t Manage What You Can’t See
During client visits the last year, I hear more about internal and external reporting than any other topic. Our industry needs better internal reporting to manage the business and the cost and to study the KPIs and how they compare with the industry.
Simply having a boost in your day-to-day efficiency - gained through visibility across your operations and electronic automation - is a reason to adapt to something new. Migrating to a new software solution has enabled freight forwarders and customs brokers the ability to process more files per month per person than ever before.
#5: Keeping Pace with Compliance, or Falling Behind
Shifting government regulations can also be a compelling reason for change. Currently, the new Customs & Border Protection’s Automated Commercial Environment (or ACE) has really tipped companies toward new solutions in the United States. Many potential clients are coming to market based on the new initiatives in ACE.
Having electronic automation is one of the most prevalent reasons for change I hear from customs brokers. Being able to process more files per month per staff member has led them to some of the most significant gains in overall efficiency.
Some Final Considerations
However, you must also take into account your client’s requirements as a basis for change; if you cannot provide the automation they need, you can bet someone else will. These requirements usually center on your ability to send and receive data, while providing robust reporting tools.
While you may hesitate at the edge of change - considering the merits of available tech, the benefits and drawbacks of change - don’t forget to measure the consequences of inaction. If there truly are costs of doing nothing, simply spending some effort to consider them can be reason enough for changing your business for the better.
Bill Todd is Business Development Manager at WiseTech Global
Media Contact: Lisa Tree, firstname.lastname@example.org