The objective of back-office automation is to “do more, with less”. As clubs prepare to exit the economic downturn caused by the 2020 Pandemic, they have an opportunity to look inside of their club’s business processes and operations. This is a chance to explore how to drive human and financial savings to support membership value strategic initiatives. In 2020, “recovery” is not enough: it is time for a “renewal”: A fresh look at leadership. It is time to create a Boardroom-level BPI roadmap.
Here are five business process improvements (BPIs) worth highlighting: Supply Chain Control, Invoice Automation, Payment Automation, Labor Management, and Beverage Management. Each process improvement has specific outcomes, but they all will reduce hard and soft costs that can be reallocated to your strategic initiatives.
Supply Chain Control is the process that includes supplier and product selection, product (loaded) cost, purchasing and receiving. Deliberate, controlled supply chain management results in product consistency and reduced cost with no depreciation of quality. This control provides rich data and analytics that can be used to make continual improvements to the supply chain. These executive decisions pertaining to controlling supply chain include approval workflow and group purchasing alignment. Money, efficiency, and accuracy are all impacted by supply chain control. In addition, the documentation of supply chain control is essential in the event of foodborne illness and contamination.
Invoice automation provides a significant efficiency gain in data input. Several large suppliers provide electronic data interfaces (EDI) that automatically sync invoice data into a club’s AP system (ERP or CMS), but the vast majority of invoices still require data entry. Automating this process reduces human error and man-hours. Invoice automation is capable of inputting invoice data and matching the data against order and receiving documents to ensure complete accuracy. The process verifies what is paid, against what was contracted.
Payment automation eliminates the costs and time involved with paying invoices that are approved and in queue for payment. While some companies provide comprehensive payment services to pay more than 90% of invoices, others pay a partial set of suppliers. In addition to saving time and costs (postage and stationery), many companies that automate the process provide a rebate to the club based on “card” payment. One requirement to automate payments is to provide a payment information file (PIF) to the provider. This can be done by an interface to club management systems or by a payment report file that you may download and transfer to the provider.
Labor Management automation is one of the most under-utilized tools in the club industry. Many clubs overstaff to “serve their members”. In the age of renewal, is overstaffing in the best interest of the club? Labor Management Automation provides scheduling guidance based on each club’s unique and specific metrics. By matching shift coverage with time of day and position hours, clubs are able to schedule their specific proscribed service levels instead of over (or under) staffing.
Beverage Management involves more than buying and selling alcohol. It includes managing the state and local regulations pertaining to suppliers and payment, receiving into inventory, managing inventory, and assets, as well as the expense at consumption. It is no longer sufficient to just hit a cost or sales target based on previous years. This is the time of renewal, not recovery. Recovery results in repeating a less than optimal solution year after year. Beverage management is a business process that requires improvements in order to ensure compliance and optimal cost control while satisfying membership. Automation documents compliance and controls, reduces the time to order, receive, take and manage inventory, documents costs of transfers (events) and pay suppliers, ensures accounting process compliance and provides detailed data to improve ordering and inventory control. Automation is also capable of interfacing to POS to accurately record consumption (expense) and deplete inventory.
BPI through automation is not a panacea and requires effort in prioritization, provider selection and deployment (implementation), but this is not a reason to revert to the pre-pandemic process. This is the time to evolve and renew. The reallocation of time and money saved to member-facing initiatives paves the way for fiscal and operational transformational success for clubs that are ready for change. All automation improvements require dedicated, thoughtful and planned transition management. When you are ready, be sure that it is included in your plan.
There has never been a better time for every board of directors of every club, to take on the task of developing a multi-year BPI plan, starting this year. The plan should include monitoring, evaluating, and approving BPIs on a continual basis. This is a basic and core responsibility of leadership. It will improve stability and security for the future of their clubs. Now is the time for renewal, not for reversion.