When does tech make you money and when does it cost you?

Technology can be profitable or costly, but more of the former if tech is harnessed to improve the customer experience.

cutting costs

There’s an interesting Forbes article on the topic of turning a cost center into a profit center. In it, author Larry Myler talks about three ways to “become a hero” by:

  1. Killing overhead,
  2. Inventing revenue, and
  3. Supporting company strategy.

Having worked in cost centers within organizations myself, I was skeptical as to whether this can actually be done. If so, it would change the game for just about any company trying to reduce costs and increase revenues (and that would be almost every organization).

As I began looking around, I found a few notable examples, not the least of which is Amazon. The Amazon business model, from the beginning, seemed to be one big cost center. Early on, the strategic emphasis was on amassing customers and transactions rather than profits. That has changed now, but one of the more dramatic areas where Amazon has made the transition from cost center to profit center is Amazon Web Services (AWS). Amazon literally shifted its massive server cost from a necessary evil to a strategic (and profitable) offering of on-demand cloud computing platforms.

If you compare the AWS transformation to Myler’s Forbes article, it appears to be a perfect match — reduce costs, increase revenues and support company strategy. But what about the rest of us business managers and owners of companies that are not Amazon? And what if we don’t have a tech-centered offering or strategy? Well, you are still tasked with making technology work for your company, not against it. Here’s a non-Amazon example.

Let’s look at a company that might be more comparable to the one you work for, or own. Day Translations is a service provider that translates any content — movie subtitles, immigration applications, medical information, etc. — into just about any language on the planet. Sean Hopwood, Day Translations founder and president, views tech costs versus profits this way: “When a technology helps you connect with and serve customers better, it’s a revenue generator. But when tech gets in the way of better service, creates friction or disconnects your company from customers, it will cost you every time.” Hopwood has grown his business by understanding how technology helps or hurts the customer. Here are his recommendations.

Get rid of your conversant phone system

We’ve all been frustrated by the robotic phone system phrases that confront us when we urgently need help or even just have a simple question. These phone systems might as well be saying, “If you want to press ‘one,’ press ‘one’ now…” When people call your company, they want to talk with another person. So don’t let technology (especially the worst, most outdated type imaginable) get in the way of what your prospects and customers want most — the human touch.

Use tech to engage with customers as quickly as humanly possible

“When a customer emails us, we get back to them within ten minutes, and when someone is on our website and uses our instant chat option, we respond with 30 seconds,” boasts Hopwood, who is not in any way against technology, but sees it as a means to an end. Without email and instant chat, his people could not be as responsive. However, when companies have a policy of responding to email inquiries within 24 hours, that’s when tech will cost you money.

If tech can help you with your core business, use it

We all use a variety of applications to facilitate our work. That’s profitable. But an overreliance on apps can cost you. In the translation industry, there are tech solutions, but they can’t take the place of talented linguists who understand the nuances of language. “Many clients have come to us because they trusted a tech solution for their crucial translation needs. One small mistake often leads to catastrophe in this business. We use technology to a certain extent, but our finished product is always a result of professionals,” says Hopwood.

Technology can be profitable or costly. If you can harness tech to improve the customer experience, you are well on your way to reducing costs, increasing revenues and supporting company strategy.

Copyright © 2017 IDG Communications, Inc.

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