The market for contract cleaning has increased over the last 2 years but that is where the good news ends… The increase in demand has created an increase in competition (some estimates put this at up to 40,000) putting already slim margins (averaging 4%) under pressure.
Safeguarding that 4% is the over-riding concern among many charged with leading the business whilst balancing this with the need to win contracts and grow the business.
Many in the sector have already been burnt by the vanity of growth over sanity of profit and recognise the need to keep a strong handle on costs but with strong competition are struggling to find anything left to save and are in danger of cutting too far and risking Quality and Reliability which can turn into a spiral of cancelled contracts.
The secret to many within this and other sectors is to borrow some of the lessons from Amazon (their international margins are not very far off from contract cleaning) who relentlessly focus on efficiency whilst providing excellent customer service.
The focus is never about cutting the service they provide, but the internal focus on simplification, automation and efficiency of the internal activities that deliver the service.
Automation though technology enables organisations to eliminate much of the administration and paperwork whilst enabling them to get real insight into their organisations performance and profitability -or otherwise- of contracts. It provides real-time information enabling quick decisions and adjustments to be made to keep the business on track. The impact of this cannot be underestimated, it enables early intervention, not a retrospective post-mortem. This is not just simply about profit or efficiency but also tracking quality and outcomes. The importance here is that poor quality or reliability will at some point turn into customer attrition and is therefore lead factor and you cannot prevent what you can’t predict.
However, the rush to implement IT systems should be kept in check. Software solutions will deliver enormous benefits, but not by themselves! Software isn’t a miracle cure nor a mind reader for your organisation. You need to invest not just money but critically time to ensure that the software delivers to your objectives.
Before rushing there will be a need to review the processes being automated; A key objective should be to simplify these processes and methods. Simplification and clarification of processes is a precursor and will yield positive returns. Often organisations are unaware of the growth in complexity of processes and contracts as there is very little visibility (often as paperwork creates “data islands”). Secondly if you do not understand in detail your processes then you have no hope of any software replicating them. Thirdly complex processes will impact on the solution, the cost and the implementation of the solution.
Start small. An expensive ERP solution might seem attractive, but will it really address your key pain points or just replicate or – worse – make operations even more complicated.
Be focused. What’s your greatest cost? In most organisations your greatest cost is your people. Automating pay through Time and Attendance will significantly improve efficiency, accuracy and savings by removing payroll errors, fraud and overpayments.
But there is more to be gained by Time and Attendance than simply automation, the ability to track employees at each client site enables quality of service by providing real-time updates. With real-time attendance information you can mitigate non-attendance by deploying other resources ensuring that the customer is not impacted by absence – this level of quality assurance keeps you at the top of the contract pile while others are discarded through poor reliability.
Avoid IT complexity. Many organisations are going lean and demanding cloud/SaaS solutions to avoid the complexity and overhead of managing the solution internally. SaaS also brings its own financial rewards as well by spreading the cost and providing Pay As You Grow payment models.