GUEST OPINION: Utilising resources more effectively makes it easier to weather tough times.
Is your business braced for challenging conditions in the new year? If you answered in the affirmative, there are signs aplenty to suggest your pessimism is warranted.
Business failures are currently at their highest rate since 2021, according to the credit reporting bureau CreditorWatch. The August 2024 results of its Business Risk Index showed the failure rate for Australian businesses was sitting at an average of 4.95 per cent; up 17.3 per cent since January.
High inflation, low levels of consumer spending and interest rate rises have driven the increase.
Meanwhile, B2B payment defaults have risen by a whopping 68.1 per cent over the past year and are now at record levels, as a growing number of businesses find it impossible to meet their obligations.
The status quo is a bleak one and likely to remain so, at least in the short term, according to CreditorWatch chief economist Anneke Thompson.
‘Our data, consistently and for some time now, indicates that Australian businesses are operating under extremely challenging conditions – particularly those in the Food and Beverage, Arts and Recreation, Retail Trade and Construction sectors,’ she writes.
‘…We don’t expect businesses to feel more confident until there have been at least two or three cuts to the cash rate. Unfortunately, this means it is likely things will get worse before they get better.’
Doing more with less
Against that backdrop, it behoves businesses to look for opportunities to reduce overheads and operating costs without, of course, compromising on the quality and service they deliver to their customers.
That means identifying ways in which resources can be utilised more effectively to meet business demands – a process that’s known as capacity management.
Done well, capacity management can prevent process bottlenecks, limit production delays and the overuse of resources, cut costs and increase overall productivity.
While initial opportunities to improve may be easy for your business to identify and action, capacity management shouldn’t be a one-time exercise.
Rather, ahead-of-the-curve organisations make it part of their continuous planning process; drawing on historical data, market trends and business forecasts to make data driven decisions about how resources are best utilised.
Doing so allows them to adapt quickly to market fluctuations while minimising their overheads and outgoings. In many instances, they’re able to pre-empt performance issues by enacting corrective measures before problems surface.
Future requirements can be predicted based on current utilisation levels, and upgrades of plant and equipment planned, budgeted for and implemented in a timely and systematic fashion.
Tools to make the task easy
While the benefits of proactive capacity management are substantial, it can be challenging to realise them without the right tools. We’re talking here of operations and enablement technology which allows you to analyse your business’s resource utilisation in the most granular of detail.
Implementing an operations enablement and workforce platform makes it easy to examine every aspect of your operations in real time. You’ll be able to conduct in-depth data analysis, chart your activity levels and extract actionable insights to help you optimise your use of materials, facilities and human capital.
Advanced modelling capabilities will allow you to explore the likely outcomes and potential benefits in a range of scenarios, prior to enacting change.
Select a user-friendly solution that incorporates self service capabilities and you’ll be able to super-charge the efficiency of your human resources function into the bargain, by enabling your employees to take over many of the admin tasks currently performed by your HR team.
Starting 2025 strong
There are tricky times ahead for Australian businesses of all stripes and sizes, as they strive to remain viable in the face of rising costs and lacklustre demand from consumers and commercial customers alike. Utilising resources more strategically will help your organisation minimise wastage and operate more productively and cost effectively.
With the right platform in place, finding opportunities to tighten up every aspect of your operations is a straightforward matter. It’s foundation technology that will help your business navigate the many challenges 2025 has in store.