Digitalisation, innovations, work-supporting tools. Theoretically, we all agree that it is good or even necessary to have them implemented. But in practice we treat them as costs. Often as superfluous costs or costs that can be avoided at a given time. In consequence, many investments are put aside for later. Meanwhile, they could support daily operations and help in optimising the budget. Because good and well-used systems generate savings and improve financial results in the long run.
Of course, it is not easy to adopt this perspective on investments in technology. However, it is always a good idea to analyse the situation and verify how a new tool will change the company’s modus operandi by looking at actual figures provided by manufacturers. All in all, we innovate, because we want our organisation to work better, faster and more efficiently. With higher efficiency, we gain more time for new projects and more time is more money. But there is one thing to remember: choose solutions which provide a quick return on investment (ROI). In a way that is easy calculate and predict.
An ideal world or reality?
It sounds too perfect to be true. And for many managers it is nothing more than pipe dreams. However, ROI is not just fantasy – it is reality and real help in assessing the profitability of any expense. Including expenses on IT. As for TIMATE and our solution, savings generated in specific areas can be easily calculated. For instance, the savings resulting from the enhanced use of the working time are from 5% to 20% of staff costs and efficiency increases by at least 5%. Financial gains are evident and they form the basis for our settlement with customers. We do pilot implementations to prove that savings are not just empty promises, but the actual effect generated by the system.
Importantly, ROI can only be calculated when we know the initial parameters and we measure how they change after the new solution has been implemented. The more precise the indicators provided along with the system, the more accurate the calculations will be. But what can be measured and where can you save by implementing an IoT tool?
Where do the profits come from?
IoT systems are networks of interconnected electronic sensors that collect and exchange data regarding the work of people and devices. In this definition, the crucial word is “data”. Data and data analysis. By those means, an entrepreneur can assess how the company is operating and implement relevant improvements as well as verify at once if the modifications have brought the expected results. The way the business functions can be quickly enhanced, which means savings. How come?
Firstly, better work organisation.
Ongoing visibility of processes makes it possible to instantly detect any sort of irregularities. Ineffective circulation routes, an inadequate layout of workstations, a messy schedule of deliveries which causes downtime, faulty team composition – all of these affect productivity. By eliminating errors and adjusting the environment to the needs of employees on the one hand and of the production processes on the other, it is possible to boost the performance of the entire enterprise.
Secondly, smarter use of the working time.
The data regarding the work of teams enable better time management and reduction of downtime that is caused by faulty organisation of processes or by queues at workstations or machines. TIMATE’s surveys indicate that every employee in large production and logistics businesses wastes 460 minutes per month on average. Minutes that are paid for. By streamlining their processes, enterprises can eliminate downtime and make a much better use of their employees’ working time.
Thirdly, more effective management of resources.
That’s right – when we know the causes of downtime, we can manage people’s work in a smarter way. And make better employment plans as well. Sometimes the problem is not the insufficient headcount, but poor work organisation, e.g. faulty team composition, an ineffective layout of workstations, too few machines or devices. It is a notorious situation when a company pays for overtime and it has massive downtime on the very day when the overtime is required. The optimisation of processes leads to a much better use of the available teams. In addition, it may turn out that when the working environment is better organised, employees perform their duties faster, which means that more orders can be accepted and more profit is generated.
Fourthly, improved employee safety.
IoT systems can also monitor and support employee safety. Studies by IOSH indicate that employees working in a safe environment are more effective and satisfied. They also go on the sick leave less often. This provides an obvious boost for the company’s overall performance. In addition, safer working conditions means fewer accidents, so fewer damages and fines for defective organisation of the workplace. This, in turn, means that the company saves money.
Fifthly, better communication and exchange of information.
The State of the Global Workplace: 2022 Report by Gallup says that the global cost of disengaged and unproductive employees amounts to USD 7.8 trillion. In order to boost engagement, you need communication. The McKinsey report shows that teams that communicate effectively achieve the increase of performance at the level of 20–25%.
Employees want to be kept informed about the tasks they are supposed to do and about how their work is assessed. Of course, it is very difficult to provide such feedback without the support of technology. Managers are unable to make daily observations and evaluate each and every employee. They are assisted by automation and IoT systems which can independently summarise the business day and assess the teams, providing all necessary information to employees.
Digitalisation with all its various dimensions is not just a fashion that will go away. It is an opportunity for companies to work in a faster, more efficient and more automated way as well as to implement better organisation of processes that will lead straight to higher profits.