It seems that nearly every day we are seeing some major issue regarding yet another problem with technology. This is actually a shame when you realise, when a technology tool is fit for purpose, of good quality, and not employed for the wrong reasons, it can assist our businesses positively in so many ways.
The problem we have in the business environment however, is that employing technology tools without a due risk evaluation, can destroy value. In other words, any positive short-term benefit may soon be lost via unnecessary costs because of unforeseen consequences over the long term. Management must therefore be able to apply a degree of intellectual integrity to justify the use of technology tools in order to ensure the tools add value to their business.
The negative consequences of technology include, but are not limited to, inefficient chatbots, technology upgrades or projects which do not achieve designed outcomes, costly upgrades, lost sales enquiries, increased incentives for cybercriminals to keep attacking your businesses, etc.
The problem is that technology tools cannot assist with helping your business in many positive ways. The real problem is that so often, proper care, due diligence and alternative strategies are forgotten when problems occur which have not been given proper consideration. Three basic examples are shown below.
1 If there is no power, how do your digital payment systems work? If you operate a cashless business, how are you going to increase sales by not accepting cash when you not only lose the current sale, you may also lose the customer?
2 How do you turn sales and invoice problems into a positive when the customer is alienated by an inefficient chatbot or an email enquiry that has disappeared into your spam folder, etc.?
3 It is now also realised that inefficient chatbot or apps, are often just another way a cybercriminal or fraudster can infiltrate your computer systems.
Looking forward from the negatives of technology, how can technology tools add value to your business?
We know for instance, that AI can be used to create tools that add value in many processes, particularly when it is employed for the right reasons, and uses validated and unbiased data in its development.
In the case of selling and payment strategies with your customers, AI will be useful when costing products and services to identify the right profitable selling strategy for each and every customer relationship. One such cost which may not be quickly applied under current systems is the cost of finance when:
- a business has debt arrangements to cover the basic cost of business, or
- when cash investments are drawn down to cover current costs caused by slow payments.
These costs are currently often forgotten or not calculated properly when pricing the costs of goods or services on credit. Hopefully, with the implementation of AI, these costs can be applied correctly for each sale. After all, a cost not covered means you are selling at a reduced price and failing to cover your costs adequately.
The objective of costing all sales correctly will be of increasing importance in the years ahead as there is every indication that the business environment will be slowing down.
AI can also be applied to create the correct reconciliation format for suppler and customer accounts. Furthermore, get the reconciliation format right, these reconciliations can then be consolidated into one reconciliation statement and provide a picture for the whole business. In fact, get that process right, and the same process can be applied across a number of different businesses managed by a central management’s consolidated business format. *
Once the above costings and strategies are the norm, AI will also be useful when customers approach your business for a special sale, the terms of which may sound valid at the time of the sale. Unfortunately, however, history shows us that many of these sales from the past have failed to produce an adequate profit, or have led to a number of unforeseen negative outcomes.
AI can also be instrumental in creating warning programs which can detect changes in customer and supplier accounts when reviews are required, etc.
If developed correctly and for the right reasons, AI can assist in the management of creating profitable selling strategies applicable for each and every customer. This objective will be of increasing importance in the future if the business environment is to fall as many economists and others are predicting.
NOTE: If you have not yet created the reconciliation system described above, Credit Matters has developed a working prototype.
Want to know more, contact Kim at kim@creditmatters.com.au, or 0411 649 261, or have a look at what we offer via our website at www.creditmatters.com.au
