The wonderful world we live in. Lessons from "overseas"?
Our world-view depends on what we focus on. Some say, that the end is near, while others point to the best economies in the developing "world" ever. Its all the same world. Some are afraid of migration and multi-multiculturalism. Others point to the beautiful effects different cultures have on our lives: art, cuisine, music and philosophies from other parts of the world enrich us, give us new and different perspectives. And lots to learn...
This is a business blog for hospitality folks: let's focus on the business side of global cross-fertilization in a time of growing anti-global sentiment. So what is the business effect of a more global world-view?
Businesses need to deal with different influence factors, many of which are very diverse in various parts of the globe. Europe for example deals with higher taxes, way higher payroll and businesses need to be able to absorb the cost of -generally speaking- way longer vacations, more social legislation-based expenses etc. The good news is that all that breeds behaviors, methods and strategies to tackle these challenges. That's the point of this post: there are lessons to be learned from "abroad".
I spent 20 years of my professional life running companies in Europe and another 25 years managing businesses in North America. Sometimes I hear business people here complain about high wages, when indeed they are lower than Europe's. European hotel companies and restaurants have had to deal with this forever. Profit margins are not too different, and so here we can learn from the rest of the world: while Europe has salaried waiters, hostesses. cooks and bartenders, we deal with mainly hourly compensation. European key strategies have all been about squeezing the last penny out of procurement, automation, mobility, digitization and lately robotics, deep learning and AI. When waiters make a salary of 3,000 Euros - equivalent of 3,500 US Dollars, and the company pays for healthcare and 6 month motherhood-breaks, 5 weeks of vacation - just as an example - how in the world does this work economically?!
1. You are forced to think "if it ain't broke - break it!". You simply cannot go on in old ways. In America we could apply that kind of thinking to our businesses equally well. We could outsmart the competition too. We too can use strategic advantages: and some do... just this month I read that by 2025, over 50% of the global mid-market and large enterprises will have deployed procure-to-pay-suites via a cloud delivery model. Which makes me wonder what about the other 50%?! (Spoiler alert: my company provides hospitality specific 'procure to pay' services)
In Europe a server has 20 tables were our server has 4. How can this be done: they use mobile handhelds. Restaurants without handheld POS terminals are the exception. Orders are designed to provide less choices to happen faster. This way servers make higher revenues (per server) and earn better tips. And you have overall even lower labor cost. Right, that's 'squaring the circle'!
2. You can specifically review which techniques and methods are being used in other parts of the world. Specifically, those with known sky-high labor cost, like Scandinavia. It is simple logic to assume lots of smart methods to cut the cost per employee. One of these methods is outsourcing. According to Wikipedia outsourcing is "an agreement in which one company hires another company to be responsible. Since 2009, the year following the global economic downturn, approximately 10,000 jobs in the US were created in business process outsourcing (BPO). What we do at ANDADO: provide an outsourced business process and automate accounting/coding. That's what we do.
3. Cloud solutions help with distributed accounting and accounting-automation. This is an excellent example: our German partner CISBOX GmbH has begun feature and functionality design of their invoice management solution in 2,000. It is fair to call their technology 'mature'. In fact every year additional features have been added. Today a midsize hotel organization in North America will save hundreds of thousands of dollars, by using it to streamline finance departments. "If it ain't broke" pertains to many areas here; not surprisingly the hotel industry seems to be more interested in that in Dubai or Mexico City...
One of the fastest growing accounting solutions is provided by our partner XERO. 1.3 Million users apply it. In their public information for investors anyone can see, where growth is most rapid and that is not the US of A. China, Hong Kong, Singapore, Dubai, Lagos, Mumbai are some of the places where the action is. And where there's action people use the latest technologies. Food for thought, certainly. Look across the pond and beyond the limitations of "if it ain't broke -don't fix it" and you will find huge opportunity and interesting, non-experimental solutions to improve profits here.