The impact of globalisation has had a marked impact on all of us and in the corporate world, remaining competitive has meant that organisations have pared down their manufacturing costs by off-shoring and reducing their support costs with call centres in countries desperate to attract jobs and investment. With the rise of on-demand services, Tony Crowhurst, FSN writer, looks at whether it is possible to run a business without any direct employees.
It is an area that will grow dramatically over the next few years and despite horror stories of lost data, issues with vendors that have deployed poor communication technology and those that do not train off-shored staff properly, there are many examples where companies have utilised technology to reduce cost without impacting on service - First Direct, the Apple iTunes store and Amazon to name a few. That is not to say that the world we live in is utopian however, both businesses and consumers have by and large benefited from the experience.
One can argue that in the past business was simpler. Those days when the fax and telex still reined supreme, businesses closed for lunch, you could not contact someone when they were on the road and orders were posted by Royal Mail. Wonderful if you weren’t in a rush to satisfy a customer order but not so good if you needed parts urgently. Nowadays a significant proportion of production is based overseas and products are only made and shipped when a customer places an order.
So can we create and run companies with zero staff and will they be successful? The answer to the first is probably no (but we can get close) and in relation to the second, just because you outsource something does not mean you don’t have to manage the people to the same degree as if they were your own. What it does mean is that we can leverage the customer and the supplier to do a lot of the work for us.
The future for virtualising the business can be split into the following areas:
Technology – Most organisations have embraced outsourcing here – whether it is IT support desk assistance or the leasing of hardware. SAAS has been discussed before in FSN as has the use of managed hosting services. Also, most organisations are aware of the need to integrate accounting, CRM and production systems. If you haven’t then you’re creating additional work, introducing the possibility of errors when moving data and you end up spending more time checking than analysing.
Sales and Marketing – Is one area where SME’s could do a whole lot better. It’s no-longer the case that a three hour lunch will elicit an order. By the same token sales and marketing campaigns have become infinitely more complex. Companies understand that you can no-longer just send out a mail shot and expect orders to flood in however, without professional assistance how can you make sure your presence is heard in the digital age? Ensuring your web site is optimised so that you can be found by customers and that you are able to track what people do on your web site is critical.
Everyone knows Google but does Google know your business?
Businesses need to remain in the forefront of their customers’ minds. Web technology (such as Google analytics is one of the tools that you need to deploy. It can help you refine your web site and for small and medium businesses it’s an area that you should pay particular heed to. It’s also an area that is ideal for outsourcing which means if your web hosting company is not proactive you need to investigate alternatives.
Likewise ensuring that who you target and how you target prospects is critical. You should also consider using a good telesales organisation that has sector specific knowledge and purchasing data from a reputable provider who guarantees quality is essential.
To put this into context – to buy 2,000 email addresses for a specific sector costs around £300, to create a targeted email campaign to those names is in the region of £500 and telesales follow-up “hits” can cost around £6. With that campaign comes all the information about whom, what and why allowing you to fine tune your marketing over time. If you did that on a monthly basis you’d still end up spending less than it would cost to hire someone freeing up your internal team to concentrate on qualified opportunities.
Infrastructure – After employees, office costs are a major expenditure - if you don’t have a manufacturing facility or retail premises why invest in offices? Companies such as Moneypenny allow you to maintain a professional telephone presence without the need to employ staff; automatic call routing services ensure that you can be reached wherever you are. You could even consider sub-letting a floor if you have a prime location and a workspace solutions company such as Regus may be interested.
Better technology means that you can also ensure all your people (whether staff or contractors) are connected all the time. The key driver for this is broadband as it allows almost seamless access to office systems and this technology is well within the grasp of smaller businesses. Have a look at what Google has to offer all and if you’re wedded to Microsoft their Online Services are pretty good as well. What that means in for virtual employees is that they can be integrated easily into the existing infrastructure of the organisation.
Back office – If you haven’t already outsourced payroll the growing complexities with the tax system should make you want to re-evaluate fast. Employment law is also becoming more involved - if you consider that most SME’s don’t have a dedicated HR manager then the time and expense managing staff is borne by existing managers. That means they are taking their eye off running the business. The same applies to bookkeeping – you still need to have an accountant (possibly only part-time) but why do you need to pay someone to process invoices? Have a look at the likes of Xero and Liquid to mention two.
So no, you can’t get rid of all your staff but you can become savvy and utilise the abundant technology and services that are available. Most providers offer trials of their software and the same applies to telesales companies who will often guarantee a certain number of appointments. The key factor is your web presence. Talk to your web site developer, look at your competitor’s web site, and see what counterparts in other organisations are doing.
It may just mean the difference between success and failure.
