Markets constantly change. That means businesses need to be constantly adapting to new trends, competitors, and environments. That adaptation also means making decisions. Historically, calculating the return on investment of a decision – a new product, service, feature, process, etc. – is what has driven business leaders’ decision making. Does the ROI yield real value? The answer to that determines everything else.
But ROI can’t be the only factor driving decision making. What about the cost of doing nothing? That is, what is the negative impact to their business of not changing, and instead coasting on proven successful formulas? If it’s not broken, why spend the time and money to fix it? If it works, it works; don’t rock the boat. Right?
That mentality is the problem: a fear of not wanting to rock the boat, not change something that has proven to work so far, is what lures businesses into a complacency that ends up doing more harm than good. Just because what you’re doing now meets your goals doesn’t mean it always will. In fact, the changing nature of markets and industries guarantees it won’t. Constant inputs don’t yield constant outputs. As markets change, constant inputs result in declining outputs.
That is the cost of doing nothing: failing to re-invest back in the business – in people, technology and, workflow processes – is a recipe for your position in the market to shrink and become less relevant.
The Cost of Doing Nothing on Consumables
The e-commerce boom created a drastic shift in the mailing industry. Traditional paper mills, for instance, have been closed or converted into cardboard factories to accommodate the spike in online package deliveries. Fewer paper mills means the cost of paper goes up. In just the last two years, we’ve seen the cost of paper grow by 25% principally because of the reduction in paper mills.
It’s not just paper. The print and mailing industry relies on a number of variable-cost consumables, like ink, envelopes, inserts, and postage. All of these account for 60% of TCO. That’s two-thirds of your total ownership costs that are subject to market whims and can’t be relied on as steady numbers.
Not making investments into your business to account for how these costs change significantly and quickly will end up putting you behind your competitors and, ultimately, tank your business. This is all the more reason why performing a cost of inaction analysis is so critical. The refresh you get from that kind of evaluation puts you in a more proactive, rather than inactive, position for controlling consumable costs.
The Cost of Doing Nothing on Compliance
It’s not just consumables that businesses need to constantly re-assess and reinvest in. Continuing to do nothing and simply lean on past proven formulas means you’re also likely not keeping up with industry regulations either.
This is a potentially devastating mistake to make. New regulatory guidelines like GDPR pose huge risks, with massive financial penalties, for companies that fail to comply with new data privacy and security standards. Service providers that mishandle and consequently expose sensitive, personal private information of their users – like medical data – will run afoul of regulators. Businesses with lax security standards that end up falling victim to customer data breaches could just as likely be held liable for millions of dollars in penalties and lawsuits.
The cost of doing nothing on compliance is everything. No company can afford to shirk regulatory compliance; a failure to invest in the necessary protocols, processes, and technologies for staying up to date with each new regulation is a potential business-killer.
Getting an Outsider Perspective
The fact of the matter is, oftentimes companies don’t realize they’re inactive until someone from the outside actually points it out to them. It’s easy to miss the forest for the trees when you’re in the middle of it; the reason the cost of doing nothing is so widespread is because most companies don’t see it as “doing nothing” in the first place.
And they usually don’t realize it themselves until it’s too late. That’s why these companies need to proactively seek outside perspectives and partners who can highlight where they’re falling behind, help educate them about how failing to keep up with market trends puts them at a competitive disadvantage and, ultimately, provide solutions for breaking out of this rut. If a print and mail operation is tasked with a job that it only then realizes it can’t execute on, then that realization is coming far too late in the game.
If you don’t know what you don’t know, an outside look is necessary for finally giving you a sorely needed perspective on trends, pain points, and how to readjust your business around them.
Think Outside the ROI Box
ROI is always a good first step toward determining value, but it can’t be the only step. ROI alone just cannot sufficiently cover everything. Partnerships – forming key partnerships with trusted advisors that have decades of experience and relationships they can leverage across print, mail, insert, and sortation – is essential to taking ownership of your cost of doing nothing.
The right partner can help you determine whether you’ve been skirting along on old models that worked in the past, and prescribe the right product solutions and investments you need to make back into the business – for your workflows, people, technologies, and processes – to ensure you’re always keeping up and your market position is growing, not stagnating.
Eddy Edel is Vice President of Product Management, BlueCrest.