Wondering what to invest in? Digitization will reduce your company costs in the long term

Automation
12.12.2023

According to our survey from March 2023, 59% of Czech companies want to invest in technologies with a quick return to reduce their costs. If you too are thinking about which technologies to invest in at the end of the fiscal year, or what to budget for next year, get inspired in the article. We have described 5 common problems that companies get rid of thanks to digitization and thus save hundreds of thousands to millions of CZK per year.

1. Long hours of manual rewriting of documents

Companies that receive documents by e-mail, post or WhatsApp spend dozens of hours a month transcribing them into an accounting or ERP system. This is tedious work that causes errors. Rewriting costs companies up to hundreds of hours of work per month depending on the volume of documents. By automating this activity, they save up to millions of crowns per year.

There are several ways to get rid of rewriting. Companies with a large number of suppliers and a large volume of invoices implement EDI - a technology for the electronic exchange of orders, delivery notes or invoices in a structured format. Thanks to EDI, among other things, document data is automatically copied into the company system.

For example, the online store Muziker saved tens of hours a month after the introduction of EDI.

Companies use EDI primarily for the exchange of documents related to goods. They use data mining tools on other received invoices. These automatically read the data from the received documents in the e-mail inbox and prepare them for insertion into the information system. The employee just checks the correctness of the data and approves it.

2. Slow approval of documents and loss of documents

A large invoice from a supplier has arrived, which in some companies means that an employee (typically the invoicer) circulates the document to three managers in the company and requires their approval and signature. If this happens regularly, chaos ensues. Invoices lie on tables for days or are lost during approval and do not arrive at the accounting office. Suppliers send reminders and people solve problems instead of working, so the company loses money and complicates its cash flow.

Physical approval of documents can be replaced with simple tools for electronic approval in a web browser. In the system, you set up approval processes for different types of documents (for example, by amount), and as soon as an invoice arrives, the system forwards it to the first approver. They receive a notification by e-mail, click on the invoice and approve it with one button, sending it to the next approver in the sequence. Everything happens faster, more clearly, and documents are not lost.

A similar solution is used, for example, at JABLOTRON ALARMS, where they shortened the approval process from days to hours.

3. Shelves full of paper documents and high printing costs

You receive documents electronically, but then print them out and file them away. If you deal with dozens or hundreds of documents a day in this way, you are adding work and spending unnecessarily on paper, printing and, possibly, shelves and spaces for document storage. In large companies, these costs can reach tens of thousands of crowns per month.

Today, many tools from ERP systems to EDI to electronic approval tools enable secure electronic document archiving that complies with legislation. If you also register documents electronically, you can use filters to find any document within a minute and you do not have to rummage through files for it.

4. Slow order picking

Warehouse is a place where digitization has a huge impact on costs and work efficiency. A typical scenario looks like this: Every morning, warehouse workers print out orders, systematically check in item by item and walk around the warehouse unnecessarily – they “pick mushrooms”.

Warehouse workers often record the distribution of goods only in their heads, so when they get sick or leave the company, new warehouse workers have to undergo lengthy training. This mode can work in small warehouses, but if the company grows or peak happens, it has to hire more and more warehouse workers or implement a smarter solution.

Warehouses use barcode scanners and managed warehouses, or WMS, to streamline shipping. Picking takes place in such a way that warehouse workers receive orders on readers or smartphones, which they process gradually. The WMS guides them to the right goods with the help of navigation and allows them to pick several orders at the same time easily. Thanks to these processes, warehouse workers handle orders several times faster. This way, companies save on jobs in the warehouse, which cost tens of thousands per month.

5. High error rate in warehouse

As warehouse workers handle orders and search for the right size among identical sweatshirts, it is easy to make a mistake—and resolving each mistake adds extra work.

The mentioned WMS helps in this case, too. It guides the warehouse workers to the goods from the order using a reader, and after reading the barcode, confirms that the warehouse worker reached for the right item. The system thus makes it almost impossible to make a mistake, and for companies that have implemented it, the error rate in the warehouse usually falls below 1%.

This type of solution was introduced, for example, by the e-shop with barefoot footwear Bosonožka, which accelerated the processing of returns by 65% thanks to it.

How to start investing in digitization

If you want to invest in the mentioned technologies and not be burned, contact us. We have successfully started digitization in hundreds of Czech companies and we will be happy to help you too.

Are you interested in the news in process digitization?

How to digitize and automate invoices, warehouses and the whole business? Enter your address below and we'll send you an email full of tips and news once in a while.