It pays to automate
Automation comes at a price, but it lets you trim your costs, increase your efficiency, provide better and faster customer service, and book higher profits.
By: Rowena Aquino-Ochoa | Aug 08, 2012 10:00 am
Most managers shun automation thinking information technology systems are too expensive, too prone to obsolescence, and too complicated to install and manage.
Vincent Tagle, president of Coolmate Corp., provider of car air-conditioning services and distributor of Denso parts in the Philippines, was among the few who believed their businesses could benefit from an I.T. system. What Tagle did not believe in was paying good money for software, so Coolmate made three expensive but unsuccessful attempts at automation before it decided to hire Global Implementation Services or GIS, a business solutions consultant and a leading partner in the Philippines of software maker Microsoft, which does not retail its products directly but does so through licensed partners.
The Filipino-owned Coolmate had opened for business in 1998 with P5 million in initial capital, but by the end of 2003 its assets had reached P20 million, and in 2005 it racked up P60 million in sales to raise its net worth to P38.7 million. Coolmate specialized in Denso air conditioners that are installed mostly in Japanese cars such as Toyota, Honda, and Isuzu, but it controlled only 10 percent of the market when it was starting out.
Growing increasingly wary of backyard operators offering air-conditioning services at much lower prices, Tagle decided they needed a system that would streamline operations and reduce overhead and let them compete with the small players. By this time the company had already spent hundreds of thousands of pesos on cheap systems that were long on promises but short on delivery.
Indeed, when Tagle took over as company president, in 1999, they had a stand-alone system called Balmori that did basic accounting and inventory, but it ran on DOS or disk operating system at a time when most companies were shifting to Windows. Tagle, who took up computer studies in college, saw they had to shift to another system before Balmori became obsolete, “[But] I never believed in spending a lot on software like Microsoft or other popular applications. For me, these software were overrated and overpriced, and any good programmer could do what the software companies offered.”
Still, the programmer they hired to design software that could run on the IBM-leased server and company-owned workstations disappeared after receiving his down payment. Tagle then turned to a Filipino software company that customized programming. It produced software that promised to meet Coolmate’s system requirements: one that ran on Windows, could network office workstations, do multi-warehouse inventory, generate reports in real time, compute local taxes, and provide training and support services. But bugs appeared and kept appearing as soon as the software was installed, and the programmer defaulted on many services that it promised Coolmate.