When we work with clients, a lot of our work is around automating manual processes to free up time. Some manual processes will always exist, but the problem is the costs never show up in the budget, so you don’t know how much of your team’s time is spent on tasks that could be done automatically, or not at all.
Here’s what manual processes are costing you.
Time
A ten-minute task doesn’t feel like much, but manual processes rarely involve just one person doing something once.
For example, a member of your team exports a report from one system, reformats it in a spreadsheet, and sends it to three colleagues, who each copy the relevant rows into their own files. This chain takes about 40 minutes across four people, and it happens weekly.
That’s 34.5 hours a year on a single data transfer task. Now multiply each team member’s hourly rate by that figure. It’s a lot of money to spend on one process, and your business may have dozens of them!
Each manual process on its own seems manageable, but together, they can quietly consume a significant proportion of your team’s working week.
There’s also the cost of switching between tasks. Research has found that it takes an average of 23 minutes and 15 seconds to get back to a task after an interruption. So, you’re paying for the ten-minute task plus the time it takes to get back on track.
Human error
Manual processes and human error are inseparable. It’s a basic feature of how humans work. We make more mistakes when we’re tired, when a task is repetitive, and when there’s no immediate feedback that something has gone wrong.
The problem is that these errors often aren’t caught straight away.
A figure keyed in incorrectly on a purchase order might not surface until the goods arrive and the invoice doesn’t match. An incorrectly updated customer record might mean a colleague acts on outdated contact details for weeks.
A member of your team will be the one to identify it, investigate it, correct it, and in some cases manage the impact. That takes time, and it has an impact on trust, both internally and externally.
The error rate for manual data entry is generally cited at around 1%, which sounds low, but if your team are manually processing around 500 records a week, you’re looking at approximately five errors every week, some of which you won’t find for days or weeks. That’s 260 errors a year.
Opportunity
When experienced people spend their time on repetitive manual tasks that could be automated, they’re not spending it on things that matter the most.
Instead of identifying process improvements or supporting their team, your operations manager is spending two hours a week pulling together a status report, and your account manager is manually updating your CRM instead of strengthening client relationships.
Manual processes will also hinder scalability. When your business grows, the volume of manual work will grow with it. And you either hire more people to handle it, or your existing team is being stretched.
Businesses that rely heavily on manual processes often find it harder to take on new contracts or expand into new markets without a significant increase in headcount. The work simply can’t be done any faster by the same number of people.
By contrast, a bespoke software solution built around your processes can handle significantly more volume with no additional resource. Off-the-shelf software can help if you have straightforward processes, but it’s rarely built for the way your business works, which means you’re still filling gaps manually.
The cost
If you want to understand what manual processes are costing your business, the calculation is straightforward, if a little uncomfortable.
For each significant manual process, work out:
- How long it takes, and how often it happens
- How many people are involved
- What you’re paying those people per hour
- How often errors occur, and how long it takes to fix them on average
The manual process that you think is saving you money over a software solution, is often more expensive within two or three years.
Where to start
The most useful first step is identifying which manual processes have the highest cost across time, error risk, and growth constraint. Those are the ones worth addressing first.
Manual processes tend to accumulate over time, often starting as a quick fix for a gap in your systems. If that pattern sounds familiar, our post on when workarounds become more expensive than solutions is worth a read alongside this one.
If you’re looking for a bespoke application, we’ve been helping replace manual processes with practical software solutions for over 25 years. Whether it’s developing an application from scratch, supporting a legacy system, or integrating with APIs, we can help.
We recently helped a manufacturer digitalise their production process and free up 50% of user’s time. Read the case study here.
