Using technology to reduce costs

By Thursday June 22nd, 2017 Investment

In the startup world, cost minimization is paramount, while maintaining a growth trajectory. In established companies, cost reduction should be an ongoing process. The way this can be done in both scenarios is by leveraging technology.

The first benefit of using technology is a reduction of staff. Instead of hiring an accounting department, companies can find software that allow even novice number crunchers to keep track of company expenses and profits. In today’s entrepreneurial world, companies have even set up human resources information systems software that is cloud based. Websites like namely.com allow management to manage the entire HR process, from onboarding to benefits. Some of these services can even be integrated with accounting systems or even external service providers to maintain seamless financial control of personnel expenses. Basic contracts can be found on LegalZoom or Business-In-A-Box. This helps reduce the need for hiring lawyers (although it means that the company must accept any associated risk), which can save significant amounts of money.

Related to reducing staff, companies can now hire contractors who work on a freelance basis. No longer will companies need to hire entire departments on a full-time basis. Graphic design, web development, and SEO can now be outsourced to anyone who is capable.  Location or physical situation are no longer constraints in hiring staff that will work on piecemeal basis.

Technology will help lower marketing costs. Viral campaigns on popular websites are not costly. Facebook will allow directed ads for about $100/month. Mailchimp and other software enable not only enables the dissemination of information, but also allows for the collection of significant user details (IP address, including location, email, browser,etc.). This can be very helpful if for companies that are going to use software to set up an inbound marketing program, which will drive customers to their website or service offering.

Common office tools can be used to avoid costs. Phone plans can be removed, and replaced by virtual telephones. Saving on the expense of phone systems. There are even virtual assistants that will manage repetitive administrative tasks. In-house servers that are used to share information can be replaced by any number of online service offerings. In addition to reducing the costs of physical equipment, maintaining a network, setting up backup and redundancy protocols, companies that outsource file storage will benefit from added security. Third party providers typically take more precautions to protect your data than an internal department would. This is because they have a vested interest in protecting your data.  While companies can protect their own data, they typically do not have the money or resources to do it as well.

The development of Skype, WebEx, Uber Conference or any number of other services mitigate the need for travel, which can save significant amounts of money and could improve the quality of life for some employees. Video, screen sharing, and audio allow for real time interactive experiences. While some of these capabilities have been available in some form or another for a long time, they are now ubiquitous and affordable.

These are some basic examples of how leveraging technology can reduce costs. There are many more technologies to explore and new needs are being met every day by innovative minds that are changing the ways that business is done.

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