How Are SMEs Reducing Their Business Costs And Increasing Efficiency With Technology?

When compared to large and medium businesses, SMEs often require a little extra helping with funding. However, it is not always possible for them to access funds readily.  So, as an alternative, they resort to cost-cutting to bring down the overhead expenses. But how much of operating expense can a business really cut down? Consequently, more businesses become inclined towards advanced tech-based operations to optimise their production process, so that unwanted costs can be lowered.   In case you are wondering how technology can help you cut costs, you need to identify the perks that follow it.  Read on to find more about the benefits of incorporating technology into business and other related strategies. 

Ways In Which Technology Helps To Cut Cost

“You seldom improve quality by cutting costs, but you can often cut costs by improving quality.” - Karl Albrecht As an entrepreneur of an SME, you should focus on improving the quality of your operating activities.  Here’s how you can achieve it by incorporating technology into your business practices -

• Online Marketplace

SMEs should consider using the B2B e-commerce market to cater to the ever-changing demands of consumers. For example, Udaan, IndiaMART, TradeIndia, and ExportersIndia are among the most common B2B platforms in the country.  Such e-commerce platforms serve as a market to buy and sell gross consumer products readily. These online marketplaces also come in handy to open new sales channels and reach out to different market segments easily. This directly allows businesses to clear their inventory faster.

• Use Of Online Customer Management Software

Have you ever thought of using customer relationship management software or CRM?  The fact that CRM helps to manage business and customer relationships, and is also fit for every size of the business, making it a valuable addition for businesses, especially SMEs. When you install this multifarious software, you can benefit in several ways including - 

• Ease of managing clients and contacts.
• Ease of accessing contacts and customer data.
• Sharing business information and facilitating training.
• Helping to track misplaced invoices.

Since this software has a web-based management feature, you have to pay for its license once a year. Also, being a multipurpose software, it eliminates the need for purchasing different software every other day.   Needless to say, this brings down the cost of purchasing and installing multiple management software altogether.

• Automate And Integrate 

Did you know that integration, optimisation, and automation help small businesses in more than just one way? For instance, the noticeable impact includes –

• Ease of connecting with suppliers.
• Ease of tracking global shipments.
• Automation of warehouse and distribution centres.
• Optimisation of control over inventory.

Since several B2B integration solutions are available today, you need to select one that offers comprehensive features.  Want to make the most of business integration solutions?  Choose a business to business integration solution that facilitates electronic data exchange, process management, and activity monitoring, among others.

• High-Quality Equipment Based On Latest Technology

Did you know that besides boosting the production quality, high-end equipment can help to lower overhead expenses?  In fact, tech-friendly equipment helps SMEs to avoid unexpected costs like – mechanical breakdown, VR helps to lower workplace accidents and provide valuable ideas about product development.  With the implementation of advanced cybersecurity tools, you can lower the risk of cyber threats significantly and protect valuable data. Similarly, if you install eco-friendly technology, you will save a significant amount on electricity bills.  

• Fintech Lending Solutions

SMEs often struggle to access funds from traditional financial institutions. But with the growing popularity of fintech lending solutions, small businesses can now avail customised and integrated cash flow solutions readily.  Usually, you will find reliable fintech companies that allow SMEs to access funds through invoice discounting services instantly. Such tech-based lending services allow businesses to upload unpaid invoices on the financier’s portal and meet basic requirements to raise funds online itself.

• Provide Technical Training To Staff

You must note that besides incorporating advanced technology and modern equipment in your business operation, you need to provide suitable training to your staff. Doing so, you will benefit in two distinct ways – it will help you to improve product quality and boost revenue. It will also help staff to increase their productivity and efficiency.  Other than these, SME owners can invest in accounting software to minimise accounting errors and store accounting data optimally. Hence, you can increase your firm’s efficiency and lower overhead expenses through technology in these ways.

Bottom Line

SMEs that are including technology in their business operations are successful in improving their efficiency and lowering overhead expenses. Nevertheless, as a small business owner, you need to be smart when it comes to selecting the most suitable technology and production mechanism to maximise rewards.