Why
do you invest in technology? I’ve always argued there are really two
reasons. The first reason is to save some money as you make your
company more efficient. The second reason is to accelerate your
company’s ability to grow. In an up economy, the investments usually
favor the growth part of the equation. In a down economy, the pendulum
swings to trying to save money. Right now, you are seeing the saving
part of the equation come to the forefront.
I was reminded of the equation by the recent statements from two
companies that depend on efficient transportation to feed their bottom
lines. Both Federal Express and UPS need to keep finding more efficient
ways to move packages from one location to another. In an era of
$4-a-gallon gas, the need for efficiency changes from a nice-to-have to
a must-have.
In a prepared statement accompanying the company’s revenue results,
Federal Express Chairman Fred Smith said, “Record high fuel prices and
the weak U.S. economy dampened volume growth and substantially affected
our bottom line.” UPS also cited increasing fuel costs and a slowing
U.S. economy as having a negative effect on the company.
But that quest for transportation efficiency is not the sole
province of large companies. Any company that relies on moving goods
and people, or that is affected by the rising cost of oil (and that is
just about every company in the United States) is now trying to figure
out if it is as efficient as its competitors and what it can do to
wring more productivity out of the people, trucks and cars that keep
the company moving.
While companies the size of UPS and FedEx can dedicate lots of
resources to efficiency, the tech execs in smaller companies often
solely bear the brunt of being the source for data to supply to the
number crunchers. Fuel consumption figures are often buried in myriad
expense forms from separate, unconnected departments. Information about
delivery truck routing and load size is often kept on paper forms or,
more commonly, in the heads of the drivers.
But a slowing economy and increasing fuel costs are going to drive a
quest for efficiency that will not let up. It is time for tech execs to
reprioritize their technology projects. Put the social network on the
shelf for a while and replace that project with the development of the
nitty-gritty information your company needs to analyze to increase
efficiency.
Providing your company with the instruments to measure and monitor
fuel costs, power consumption, and vehicle location and routing is
definitely not as much fun as cooking up the cool social network or
exciting Web site. But every company should pay attention to the
warning of the big transportation companies to recognize that the time
is now to capture the data upon which the company’s survival depends.
