Mini Case Study Shows Integration Can Save Money

Loraine Lawson
Slide Show

Strategic Integration: 10 Business-Building Tips

Ten ways that companies can use integration and integration-related strategies to build business.

We often talk about the costs of integration in a limited way. It's either something that needs to be controlled - as in, how can you get the costs of integration down? - or it's seen as something that enables something else - like BI or CRM reporting - in a way that can lead to either cost savings or revenue growth. But integration can also save organizations money in and of itself.

 

Manufacturing Business Technology recently ran a mini case study on how the world's largest producer of gasoline engines for outdoor power equipment - Briggs & Stratton - saved money by integrating the systems that manage labor costs and all of its work force management.

 

The company used a work force management solution - sold by Kronos Inc. - to integrate all work force management tasks such as timekeeping, absenteeism and scheduling. These tasks were then integrated with payroll, finance and the company's ERP.

 


Their success story is part technology and part tighter accounting practices, which, of course, were supported by the technology. For instance, you know all those little minutes when you've logged in just a tad early so you can get your coffee and start right on time? Well, Kronos' solution allows the company to use rounding rules on work time. Basically, this rounds employees' time based on the quarter - so if an employee clocks in at 7:58 a.m., those last two minutes get rounded to an 8 a.m. start time, potentially saving the company two minutes of overtime. It works the other way, too, though - employees who log in at 7:46 a.m. get rolled back to 7:45 a.m. You can see a snapshot of what that looks like.

 

Small issues like this added up over the first year, generating a substantial savings in overtime that gave Briggs & Stratton a quick return on investment for integrating its systems. Of course, the rounding is just one example - integration of the work force systems also allowed the company to allocate temporary staff on a weekly basis, standardize reasons for absence, and even determine when vendor errors caused increased labor time so they could charge back that time to the responsible vendor.

 

It's a bit unnerving, really, to see how much insight into work and productivity the integration gave the company. But it also helped with ensuring they were in strict compliance with federal, state and local labor laws.

 

So, it's a nice integration success story that's well worth a quick read.



Add Comment      Leave a comment on this blog post
Sep 22, 2011 1:45 AM Bryan deSilva Bryan deSilva  says:

Hi Loraine,

This is an interesting case study, but still one that I find annoying as it parrots the common theme. There don't ever seem to be studies that go beyond the most simple level of research. Of course rounding will save money. Of course providing Finance with labor data will give them the opportunity to manage better.

We've had customers where simple control from the clocks to disallow punches outside the policy can save millions. Kinda cool. Yes, but simple. There is so much more ROI available if organizations are willing to look. The challenge is getting them to look .

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Sep 22, 2011 3:25 AM Loraine Lawson Loraine Lawson  says: in response to Bryan deSilva

You should write up a case study on that. I agree there are too few stories on this topic.

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