“How do you achieve better profit margins?”
That’s the bottom line question for every CFO. Your job is to make sure there’s enough money in the bank to keep operations running smoothly, and to decide how your company will invest in its future. Your company’s profit margins come from:
- Controlling costs
- Increasing revenue
- Creating operational efficiency
In addition, you must manage risk. You don’t want one mistake to wipe out your business – or set you back for years. Only technology has the capacity to consistently improve your business in all 3 areas. If you’re in tier 1 automotive supply manufacturing, your business is depending on orders from the big automobile companies. Modern manufacturing industry technology can help you with:
- Accurate forecasting – Sophisticated data models and predictive analytics can provide clear forecasts, enabling you to better manage inventory, cashflow, and production schedules to optimize operations.
- Reduction in errors and product defects – Using IoT devices and machine learning, you can spot products more likely to fail or have defects. Automation workflows built into modern ERP and CRM systems speed up approvals and collaboration across global cross-functional teams.
- Distributing knowledge across the enterprise – Collaboration is critical. Your sales, marketing, production, R&D and service departments each need their own insight to do their job. Role-based dashboards in your ERP and CRM system speed up collaboration, provide visibility into key performance indicators and identify issues early on.
- Creating competitive differentiation – One way to increase profit margin and market share is to offer products and services that deliver greater value to customers. You need an easy way to customize and modify your business systems to adjust for changes in your unique business process.
One reason that even the most old-school CFO is embracing technology now is cloud computing. With cloud software like Microsoft Dynamics 365 for Finance and Operations, you’ll find new opportunities to improve profit margin. Here’s why:
- There’s no big upfront costs for hardware or software – less capital expenditure.
- Cloud software is automatically updated and upgraded – less risk, less administrative overhead.
- Many industry and functional packages are available – if you buy a solution like Microsoft Dynamics 365, you have access to thousands of add-ons (less risk, less cost).
- Employees can access the system wherever they have an internet connection. That means your engineers in Michigan can easily collaborate with your factory in Mexico.
- Now, more data means more information and insight. Prior to the cloud, data would be discarded because it was too expensive to store. That information can now be used, and even combined with big data and historical data to provide even better information.
Author: Mark Schindler, Software SalesOther articles you might be interested in: