Challenging Economics

It started at the second State of The Union Address in January: a call for upping the minimum wage from the federally mandated $7.25 to $9 an hour. And while some cheered for this, many business owners and managers had a different take. With all the uncertainties surrounding emerging healthcare regulations, an anemic economy (at best) along with other cost pressures, many businesses that rely on the human capital have some tough decisions to make regarding hiring or firing, as this article in The New Yorker explains.

Technology For The Bottom Line

So where does business go when the going gets tough? Technology. Some innovative businesses are embracing new technology to help their bottom line and even avoid going out of business. So, in many situations, it’s not nice-to-have technology, it’s must-have technology.

A recent Wall Street Journal article cited that some business owners say they now see a possible solution to the problem of ever-increasing expenses of having employees for specific roles: replacing workers with new and cheaper technologies designed to help employers simplify operations.

Since many hardware and software prices have decreased in the past dozen years or so, these technologies are now more readily available and affordable to more companies.

When Costs Crash, New Markets Can Emerge

Remember how expensive tablets were when they were the “shiny new object”? The folks at IHS, a market research firm, do. They tell us that first edition tablets were priced at over $1,300 in 2009. Since then, prices have dropped to $394 at the end of 2012. For those counting, that’s a 70% reduction.

Furthermore, online app-building tools that make those tablets so useful in a commercial environment have also become available at substantially lower costs. In fact, some are even available as do-it-yourself app options.

While the big corporations are used to dealing with rising labor costs, small and mid-sized companies are often directly challenged by higher wages. And that’s even more pronounced in a weak economy. Too often they just don’t have the options of raising prices without the after-effect of decreased sales. Plus, these companies are already feeling the pressures of higher operating costs associated with increasing commodity prices on raw goods, gasoline, diesel and the growing costs of health-care premiums.

This is the issue facing Just Cupcakes, a Virginia Beach, Va. chain with two strip-mall locations and a food van. They saw a way to use tablets and software to automate the customer ordering process. All in all, this new approach simplified store operations and reduced the labor hours required to help the business function at a profitable level.

A growing list of services are offering ways of leveraging technology in unique ways to create operational efficiency. For example, Playbook Builder helps businesses train new employees by way of using established documents that are teamed with video training and flowcharts. This method brings consistency and a streamlined approach to the on-boarding experience. Leveraging this type of technology minimizes the time, money and man hours previously required for this task.

So What Does This Mean For You?

Forward-thinking software and hardware providers will benefit by addressing the pain points of companies on the front lines of service businesses. And this plays out in the reality facing companies of all sizes in our struggling economy. What’s more, there are simple demographics showing our aging population will be demanding more services later in life. So don’t be surprised if one day customer-focused technology like robotic nurses, home assistants and even automated automobile drivers surround us!

So ask yourself, what can your organization do to provide innovative solutions for these emerging issues?