Operations aren’t always as glamorous as sales, but they are inextricably linked. Without operational efficiency, companies limit their sales potential, like a car with inadequate tires trying to drive based on the horsepower of its engine alone.
“Reducing back-office sales staff and functions in the belief that this will hurt revenues less than reducing the number of frontline sales reps may have worked in the past, but greater complexity has made support functions essential to effectiveness,” notes a McKinsey report.
The report adds an example of how at a company that cut back-office support, frontline sales staff ended up taking on those support tasks themselves, thereby leaving less time for customers and dampening revenue.
The Downfalls of Inefficiency
While it’s imprudent to approach operations as an afterthought, too many companies still try to get by without strengthening their foundation. Many companies operate inefficiently with error-prone manual processes or using disorganized data that gives an incomplete picture or is time-consuming in trying to derive actionable insights.
Over a quarter of businesses with 1000 or more employees, for instance, still use manual processes for expense management, according to a 2016 survey by travel and expense management platform Certify. By switching to an automated system, 91% of those businesses recoup the costs of the change within just two years, finds the survey.
Not only does improving operations like this potentially cut costs, it can also boost employee productivity and experience. Instead of having an employee spending time trying to get reimbursed for a business trip, they could be moving on to scheduling their next sales trip.
So, when companies are searching for new ways to grow, it’s important to not overlook seemingly small operational issues that feed into a company runs overall. And consultants can play an important role in helping clients understand how and why their operations affect their profitability.
The Power of Energy Management
Energy costs are one area of operations that are easy to overlook but costly to ignore. For commercial real estate organizations, for example, energy is the largest operating expense in commercial office buildings, according to Energy Star.
Using energy analytics software (EAS), consultants can help their clients get a more complete picture of their operations, beyond just in terms of energy costs.
For example, EAS may show that a company uses far more energy to manufacture its products compared to competitors. Consultants could then help clients analyze why that’s the case, which might yield insights such as that running three shifts instead of two helps spread the energy costs throughout the day rather than paying more for energy during periods of high demand. With a consultants’ help, the company could then determine how to best run a third shift without increasing overall costs, which might require some combination of staffing adjustments and equipment upgrades.
Yet if companies ignore the costs of energy and only focus on sales, they could be swimming upstream unnecessarily, such as by adding new product lines that require so much energy to produce that they’re far less profitable than it would seem based on the cost of materials.
So, if companies want to maximize their sales potential, they need to also make sure that keep an equally close eye on operations, including how they manage energy usage.
Request a complimentary energy efficiency assessment to find out how Artis Energy’s RTIS® energy analytics platform can provide you with the visibility and insight to transform energy from a fixed cost into a distinct competitive advantage.