Budgeting for Automation – a sound investment for FY24

With Australia's EOFY drawing near for 2023, many of you will have FY24 planning well underway - busy crunching numbers in multiple spreadsheets and locking in budgets. 

If your company hasn’t finalised planning, you may still be deep in the throes of revenue projections and expenditure analysis. Asking yourselves, what will the business spend money on next year? A new smart racking system for the warehouse? Perhaps a couple of new trucks? Or maybe you’re considering holding off on any capital spend this year.

If you’re like the many people we speak to across Foodservice, Automotive & Industrial, PPE and other industries, your team is no doubt scrutinising every proposed item in the budget and judging against criteria such as:  

• Business goals
• Return on investment
• Risk
• Resources

And overarching all of these is PRODUCTIVITY. What efficiencies will we gain? How will they affect the bottom line? Will it help us do more with the same (or fewer) resources?

Yes, thanks to the media and government, the topic of productivity is on everyone’s lips these days. We’re all seeking ways to boost company productivity without letting costs blow out elsewhere.

So how can SMEs ensure that FY24 investments: 

1. are aligned with strategic goals,
2. will increase productivity, AND
3. deliver genuine ROI? 

We believe automation is worthy of serious consideration here. In fact, we believe it’s a no-brainer. 

Automation is an investment that makes excellent financial sense. Especially today. 

Automation unlocks your cost reduction potential

From our travels talking to business owners and their teams, we know that wages are by far the biggest expense for most companies. In fact, labour can account for up to 70% of total business costs. Seventy percent! And whilst the cost of goods may be slowly stabilising (or even falling in some industries), the cost of wages and services continues to rise.

But there’s hope... Automation of services is achievable and can materially reign in your service-related costs.

By streamlining manual, repetitive tasks, you can minimise reliance on labour-intensive processes, and ultimately reduce labour costs. Fewer employees may be needed to perform the same amount of work, generating savings that can be reallocated to other critical areas of the business.

When you automate a manual process, you gain efficiencies where previously there were bottlenecks. If we look at purchase order processing as an example, cost savings might take the form of: 

• redeploying staff freed by automation into new, more strategic value-adding roles
• foregoing the need to replace every employee who leaves the business
• slashing overtime and extra shifts in your business (this is a big one)   

Automation’s cost saving benefits are not just theory

We know this to be true because we’ve seen it firsthand with Lucy customers.

We brought sales order automation app Lucy to market 6 years ago. In a nutshell, Lucy was born to solve the problem of wholesalers and distributors spending huge amounts of staff time (and therefore money) dealing with incoming purchase orders. Emailed PDFs had to be manually processed before the warehouse could start picking, packing, and delivering.  

This kind of manual double-handling is common in many companies, and often goes practically unnoticed. “It's just the way it’s always been done.” But it doesn’t have to be. 

• When Royal Foods handed their purchase order processing to Lucy, they freed CSR Dani from her brutal 4am data entry shifts, streamlining their order processing and speeding up fulfillment.
• Kincrome once had a third of their CSRs tied up in order entry, until they brought Lucy on board. Nowadays, Lucy processes over 2,000 orders per month (many with 300+ order lines!) across Kincrome’s 4,000+ customer base.
• Disc Brakes Australia were up and running with Lucy in just 4 weeks, watching their productivity climb right from day one. DBA reckon Lucy is a "great solution to help scale order processing"

Lucy allows the team to eliminate data integrity issues and speed up repetitive order processing across hundreds of orders per day. This allows quicker turn around and reduced manual processing for the team, freeing them up to undertake higher more value-added tasks.

- Phillip Joseph, General Manager - Operations, Disc Brakes Australia

The great news – the moral of the story even – is that when you choose to employ automation like Lucy, you’re choosing to measurably reduce your cost-to-serve. The labour and cost-to-serve savings here are BANKABLE.

Dollars saved below the line are not abstract savings – they're absolutely quantifiable. 

Automation belongs in your FY24 budget

Ever heard the old adage “you don’t renovate the hotel in the high season”? 

While in today’s climate, businesses may be tempted to tighten budgets and shy away from investments, there’s actually never been a better time for SMEs to take advantage of both the immediate and long-term benefits of an automation project.

Automation unlocks cost reductions, enhances efficiency, and allows you to adapt quickly. It elevates customer experience, provides data-driven insights, mitigates risks, and makes you more competitive! By allocating dollars to automation, your business can not only weather the storm, but also be positioned for sustained success - in both lean and prosperous times.

So stick with us - next week we'll talk about what it might actually cost to implement automation, using Lucy as a test case.

As always, if you’d like to discuss order automation for your business, don't hesitate to get in touch!