November 16th, 2018
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3 Ways Business Can Reduce Costs by Embracing Technology
The globalized world and communication technology easily implemented by any business creates two scenarios that can either be an advantage and create opportunities for organizations or can create threats that can make a company vulnerable to competition. The first scenario is that globalization creates new markets where a business has the potential to an expanded reach and serve a greater number of customers. The second scenario is that the same concept creates the opportunity for other businesses anywhere in the world to enter their market and offer similar products or services at reduced prices. How businesses choose to see the globalization makes a great difference in strategy as they create one of the two previously described scenarios. The fact is that an interconnected world will create pricing pressure. Nevertheless, with quality products or services, any business can leverage the power of technology to help reduce costs and create competitive advantages. Here are three ways business can reduce costs by embracing technology.
Recent studies have shown that telecommuting creates a number of benefits for both workers and companies without reducing productivity. In fact, the opposite effect is true. For example, American Express increased the productivity of employees by 43% when providing their workers with the opportunity of working from home. Businesses can save money on infrastructure costs including space and electricity, among other operational expenses. Companies that allow employees to work from home can save an average of 10,000 dollars a year while also saving employees 6,800 from not having to commute to work or other associated expenses. Companies like IBM cut real estate costs by 50 million while Sun Microsystems saved 68 million. Therefore, the flexibility and cost reductions are a benefit to all parties involved, including customers, as these savings improve the profitability of an organization and can help create competitive advantages. Telecommuting replaces traditional overhead with technological solutions that connect people with work tasks regardless of the geographical location. Ultimately, a remote desktop connection or a virtual private network replaces a cubicle and a desk.
Just like telecommuting, distributed teams have the advantage of saving businesses with traditional infrastructure costs such as office space. However, forming a well thought out and developed team can create a lean and highly efficient way of solving problems and assist in creating new and innovative products and services. This is a result from being able to tap into a larger talent pool where instead of focusing on local talent, companies can recruit anywhere in the world. As a business creates a remote culture, the flexibility serves as a retention point. These teams are highly efficient, cost-effective, and productive because they are created with the idea of achieving certain goals. Additionally, they use tools that create an environment conducive to remote-style work and collaboration among other members of the organization. Tools that include Skype for business video conferencing and a high-speed connection create availability and contact anywhere around the globe, thus reducing organizational costs.
Global Reach with Technology
Technology eliminates borders and expands the reach of all companies. Although some businesses take this as a threat, others thrive at the possibility of reaching a new market and adapt to the new ways of doing business. There are difficulties and entry barriers that companies must overcome; however, those that accept change and incorporate the new technologies that create efficiencies that reduce costs place themselves in a position to be successful. As the shift occurs, companies can take advantage of the benefits derived from the reduced operating structure of telecommuting, the diversity obtained from distributed teams, and the power and reach of technology to create sustainable competitive advantages.