How Your Budget Predicts Your Revenue Potential
By Jim Laverty
Part 1 in a Series about Budgeting for a Cloud Warehouse Management System
You have an enormous capacity to increase revenue within your supply chain and become a hero at your company. An easy way to see how well prepared you are, is to look at your IT budget.
Your budget is the key to driving new revenue. It tells a very specific story about how your organization will harness and exploit the power of new technology to drive business growth. Most importantly, it answers these three essential questions about increasing revenue:
- How are you becoming more agile?
- How are you reducing costs?
- How are you transforming the customer experience?
As you start thinking about your budget for the next fiscal year, consider the areas that address growth. Become a strategic business advisor and recommend new ways to increase revenue. If you have not transitioned your supply chain management technology to the cloud, a technologically advanced Cloud Warehouse Management System is a top priority for your budget.
Budget to Drive Growth
According to a spokesman from Gartner, a leading technology research firm, even though many organizations are tempted to go into cost-cutting mode during budgeting season, most senior executives today expect new technology to address the tough challenges in the coming year. He continued:
“CEOs are combining analytics with other technologies to create new capabilities, for example, analytics plus supply chain for process management and improvement. Meeting business expectations for increased growth, reduced cost or a transformed customer experience normally involves a significant increase in resources.”
Your budget should represent the value that you are bringing into your organization. Essentially, it is just a priority list of the steps you are taking to prepare your organization to improve customer satisfaction, add new services, launch new products, enhance capacity, improve productivity, and enter new markets.
Is your budget reflective of the technology that you need to invest in to deliver and enable your organization’s business goals? Cloud computing allows you to focus on providing business value and supporting goals directly rather than just maintaining and managing infrastructure.
Budget for The Solution
Upgrading to the cloud can resolve many of your problems like accuracy, visibility, labor tracking, billing, analytics, system integration, response times, and customer service.
The cloud is an important part of modernizing your technology, increasing agility, and reducing total cost of ownership. It provides the flexibility to increase capacity with spikes in production and demand — so you only pay for what you need.
Budget by Ranking Priorities
Your budget is a priority list of strategic goals. Take a moment to rank your upcoming priorities and use that as a basis for weighting investments on upcoming projects.
If your strategic goals are to increase labor productivity and integrate supply chain data with all other existing business systems, that is the basis of your argument to invest in new technology.
By the end of your exercise, you will have a definite set of priorities that you can use to build an effective budget or action plan.
Budget for Core Business Issues
You should be budgeting for the capability to achieve your goals. Transitioning to the cloud is a big part of the answer because it provides an opportunity to address core business problems.
A Cloud Warehouse Management System should not be in your budget because it is the hot, new technology. It should be in your budget because it speaks to a larger story about how your organization is addressing growth and how it will increase revenue in the immediate future.
Learn More About Running a Profitable Supply Chain
Through effective supply chain management, you can strategically plan your budget to increase your organization's revenue potential. Learn more about how you can grow your supply chain by exploring some of our other blog posts and giving our experts a call to talk about how your organization can run a more profitable supply chain.
- Why Your Supply Chain Plays the Largest Role in Customer Satisfaction
- 6 Threats That Can Destroy Your Supply Chain's Revenue
- 5 Key Traits of Every Successful Supply Chain
- 10 Things Supply Chain Leaders Should Do Before 2015
- How Your Supply Chain Can Make You More Profitable