In our final installment of a three-blog series on custom software development and the growing role of digital technology in small business growth, we will touch on how custom software applications can mitigate key business risks. If you missed the first two blogs in the series, “How App Development Increases Sales” and “How App Development Reduces Costs,” they are both valuable reads if you are interested in learning more about the role that custom software plays in revenue generation and employee productivity.
While risk mitigation is not something that jumps out on an income statement as a key contributor or large line item, it nevertheless has a significant (albeit hidden) impact on the bottom line.
Mistakes Are Expensive – Key Small Business Risks
There’s a reason why risk management is an important business consideration – mistakes are expensive! And what common denominator lies at the root of the vast majority of these expensive mistakes? Human error.
While human error is incapable of being completely eliminated in any business, it certainly can be mitigated by reducing the opportunities for error through technological replacement of human activity. We’re going to look at three areas of key small business risks and how to mitigate them: lost revenue, waste of resources, and legal liabilities.
1. Lost Revenue:
- Loss of sales capacities – For example, a retail store could lose its ability to register sales due to POS failure or inventory mismanagement.
- Loss of sales due to fulfillment errors – Also, the potential loss of future revenue due to customer dissatisfaction.
- Loss of accounts receivable income – Due to inaccurate billings or related financial oversight, and more.
Lost revenue threatens financial stability, stunts growth by limiting reinvestment, and is a momentum and morale killer. Fortunately, lost revenue is a manageable risk.
2. Waste of Resources:
- Under-utilized employee hours.
- Hours spent fixing or re-doing previous work.
- General mismanagement of employee activities all result in wasted labor.
The risk of inefficient allocation and utilization of resources is a direct threat to the bottom line and yet also fully manageable.
3. Legal Liabilities:
- Wrongful termination
- Breach of contract
- Nonpayment (due to poor recordkeeping policies and tools.)
While legal liabilities may not have a consistent impact on business performance, history has demonstrated that being unprepared for legal challenges can easily sink a small business. Fortunately, these risks are also manageable – in part – with the right technology.
How Custom Software Mitigates Risks
Custom software that is strategically developed to replace these kinds of human activities (and therefore mitigate human error) or to replace technology that is less reliable or less compatible with an organization’s business processes will not only increase revenue and reduce costs, but it will also go a long way towards mitigating core business risks. We’ve mentioned in previous blogs that the greatest advantage of custom software development will always be its tight integration with your unique business goals, processes, customers, and employees. This tight integration and development will increase adoption rates among employees and ensure that these risks are mitigated to the best of your organization’s ability.
At Crocodile Software, we strongly believe that a leading digital strategy begins with leveraging technology to mitigate key risks and improve our ability to “do what we say we’re going to do.” Not just for our business, but for our clients’ businesses too. These are often the main obstacles to operational excellence and scalability.
We hope this has shed some light on just a few of the ways that custom software can help mitigate your business risks. For more examples of custom software development services, check out our custom software development services or our application development portfolio.
If you have a question or comment, feel free to reach out, or drop us a quick note below. And if you found this blog valuable, we’d love if you would share it with a friend!