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In today’s fast moving environment, businesses are moving towards automation in
the business process area. This automation enables the business owner to get
real-time information, communicate with customers, work closely with vendors,
find new resources and trim expenses. With the development of the internet and
technology, businesses are able to operate in an automated, secure and fluid
manner. As we all know, operating technology changes slowly in the death care
industry. Though funeral directors recognize market shifts, most are too busy
with the day to day needs of serving families, not allowing them to change.
Automation can provide the firm owner opportunity and advantages while removing
the complexity of innovation. Web-based software solutions are designed to
provide customized, value-adding service while eliminating capital investment
and cumbersome processes. Streamlining the overall operations is the premium
reason for automating ones environment, reducing costs and gaining lost
profits. In this article we will go through the death care industry to see how
the migration to today’s business practices will benefit the business owner.
The death care industry is known for customer service, more importantly
personalized service to the family. It is by far the most hands-on customer
service oriented business of any industry and the sole reason for continued
success. In the current environment, the firm owner and/or funeral director
will manage the entire process from start to finish, manually. No one can
underestimate the value created by the level of customer service that is given
to the family. With this in mind, the rate of profitability in the industry
over the past years has been declining with the average cost of an adult
funeral going from $5,200 to $5,020. The number of deaths has increased in the
last twenty years from 1,463,000 in 1980 to 2,404,000 in 2000 at a death rate
per 1000 population of 8.54. In a different light, the projected number of
deaths will increase by 18% in 2020 to around 2,840,000 and by 2050 the death
rate is projected at 9.8 per thousand of population and the annual number of
deaths to 3,952,000. The estimated revenue for this industry in 2002 was
$10,987 million, with an estimated 26,738 operators which employed 112,262
people and paid wages totaling $2,967 million.
The industry is moving towards the outsourcing model. Firms are shifting to
central facilities for storage of the deceased and preparation, while also
having a number of “shop front” or funeral homes with chapels to service
particular areas. The sharing of automobiles and facilities to lessen overhead
costs is on the rise, also another benefit of outsourcing. Events are planned
by daily meetings and management staying hands-on with all activities. Employee
wages and purchases for materials account for the largest consumption of
operating capital. The trend for these costs will only increase as time goes
on. With the death rate increasing in numbers, this will create an operations
and financial crunch in the death care industry. The tools available for the
death care industry today are many years behind the current systems available
in other business sectors. Lack of automation and incomplete and/or complicated
systems creates additional work and reduces the value of automation. This
dynamic creates demand for new solutions and tools. For these reasons the death
care industry needs to move into the new millennium.
How do we move forward? Evaluate the entire process, beginning with contract
entry and ending with the completion of services, while providing a feedback
mechanism on services rendered. The firm owner and/or manager should be able to
review the information flow throughout the process. The key element is getting
the information to the right people in real time results in better service and
more revenue opportunities. The short timeline, number of details and constant
changes associated with at-need funeral services requires quick thinking in
order to pull off the service without a hitch. Tools that alleviate manual
errors and risk in today’s environment require employee intervention,
duplication of entry, manipulation of information or manual consolidation of
data. This process, as it stands today, increases the chance of error,
handcuffs accounting and management processes with manual effort resulting in
adjustments. The future will demand better business execution, while
maintaining accountability of data and process. In order to step into the next
generation, an overall automated approach is needed. Let’s understand the
forecast. As stated earlier, the death rate is projected to increase to 9.8 per
thousand in 2050 to an annual number of deaths of 3,952,000 by 2050. This
increase will add a growing number of deaths annually, capping around 1,548,000
by 2050. Revenue for this new growth phase should increase profitability.
However, historical data is showing an increase in cremations versus
traditional burials which will reduce the dollar per call rate significantly. A
firm with these metrics will have to process the increased throughput in order
to maintain the profit quota. Without tools to automate, store and process
information the risk associated with service delivery increases as volume
increases. A single automated platform will give the firm owner and current
employees the ability to handle the increased volume without sacrificing the
level of service.
The death care service industry needs to move toward a total outsourced service
provider. This solution allows for a single point of contact for the firm owner
providing the following services/activities: accounting services, information
technology (network assist and equipment leasing), human resources (payroll and
benefits), contract entry (pre-need and at-need), resource planning, inventory
management, customer communication (web-sites and email), customer service
(lead generation, aftercare forms, literature creation and family follow-up
surveys) and financial reporting. Although many of these services are available
from individual providers, the business owner must piece together the various
vendors and solutions. The resulting solution is often incomplete and most
systems do not share data, causing extra manual effort and reduced access to
information. The technology now exists for one provider to offer a
comprehensive, integrated set of services. With these advancements in
technology, the death care industry can expect to utilize this kind of service
that has been available to other industries for some time. Managers’ concerns
about adopting this kind of automated technology are a real challenge. Service
providers must be equipped to handle inputs from firm owners and implement the
technology with little or no interruption to the business. The major
contributing factor will be accomplishing this level of services at a reduced
cost and enabling the firm owner to capture previously consumed profit.
Migration to the next generation of operating technology will benefit the death
care industry in various areas; process integrity, identification and
accountability, functional reporting and secure means to control the firm’s
operations. Automation of business practices utilizing technology will provide
the foundation for success. In the future, acceptance of technology should be
met with optimism, owners and managers should embrace change, if not, they will
be unable to adapt to the demanding market ahead, diminishing the level of
service to the family.
For an industry dedicated to unparalleled personalized service to the families, the
future is automation.
James Vandevere
President and CEO
Ionic Services, Inc.
www.ionicservices.com
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