Episode Timeline
Step 1 – Identifying Our Problems
Hi, this is Simon Yiga and welcome to the second recording. In last recording of this yet to be named podcast, I introduced the question of whether a traditional business like ours, in ruins from the COVID-19 pandemic, can use technology to rebuild. This series of recordings documents the investigation into this question. You’re welcome to go back and listen to that introduction if you haven’t yet.
Today I’ll be starting the first step in the 7-step plan that I broke down in the introduction [episode 1] . Step 1 – week 1 – Identifying the specific problems in our business model that contributed to our collapse in 2020. This is not to mope but with the view of designing solutions and interventions to address these problems in the coming weeks.
So… What is our PROBLEM? Us. In general – The small business community; entrepreneurs whose companies were severely disrupted even devastated by COVID-19. Traditional industries that rely on the movement or gathering of people were particularly hard hit and our business Afropark is a case in point.
Afropark’s Case
We manage parking basements or parkades in the dense city center of Johannesburg. Effectively we collect parking rentals – monthly or hourly from motorists who come to the city to work or shop and need short- or long-term parking. We are essentially hired by the owners of the parking facilities in order to make them as much money as possible from their properties. This is our mission. It’s why we exist.
People often ask me why these parkade owners or landlords don’t do it themselves, that surely using us a middleman reduces the overall income from the property and hurts their all-important return on investment. And… yes it does hurt their overall ROI to outsource management instead of hiring their own team and doing it themselves.
They outsource management because it takes effort and manpower. The average small ( less than 500 bays) parking site in the city that is open 24 hours / day 7 days / week need at least 5-6 permanent staff to run. dayshifts, night shifts, relievers, cleaners and a roving supervisor. The areas where we operate are a little rough so they need to be manned ‘round the clock to not only collect cash at any time and assist parkers, but also provide a sense of security. Most commercial landlords are really only interested in the money part and will pay a fee to avoid the hassle of doing the actual work. Outsourcing is the lifeblood of many companies and in our case highlights the first problem:
High Staff Overheads – a Vicious Cycle
Traditional parking management comes with relatively high staffing costs. Typically the highest number on your companies expense budget. This means each parking site needs to generate enough income to cover these staff overheads at a minimum before seeing any other fixed costs or profits. For 10 years were running sites all over Johannesburg profitably then COVID-19 hit and overnight cities shutdown and traffic volumes dried up and we didn’t make enough to even touch our overheads let alone deliver decent returns to the landlords, in fact we were unable to deliver much for months, and having no money in a running business, is like having no water in a river. Is it still considered a river?
Now, don’t get me wrong – having less staff isn’t the solution to the problem of high overheads, in our environment we’ll probably always need staffed parkades, but the high costs make the business instantly uneconomical in a major downturn – like one brought on Covid-19.
Having a lot of people running operations also has the unintended effect of steering the company into using processes that are built heavily around human-performing tasks. Jobs done by people as opposed to machines. This then steers the company into using tools and technology that supports these processes, which in turn support their fundamentally human-based operations.
It’s a vicious cycle
This is the second and third problem:
2. Outdated processes and 3. Outdated technologies for performing the 3 Main Tasks
Let me explain our case:
We have 3 main operational tasks as a parking management business:
- Collection and maximization of parking revenue for landlords – money explains itself.
- Auditing of vehicles that enter and leave the property – We provide reports to the landlord on vital stats like occupancy rates, revenue splits between monthly and hourly tenants as well as the status of revenue collection.
- Keeping the parkade clean and safe
Each of these tasks requires people, who use specific processes and systems to perform them. Let me quickly run through the high-level processes and count how many systems are involved in doing our basic tasks.
Task #1. To collect revenue – Our 1st system is a Back-office system used by our administrator – to administer monthly tenants. Add them, remove them, update their paid or not paid status. At the actual parking site, we have our 2nd system – an electronic tag system that controls a boom gate so that we can control access only to paid tenants. A supervisor manually updates this tag system with the back-office data to keep it up to date so tenant’s access is only if they are paid up.
That’s for monthly revenue. For hourly revenue collections, we have a 3rd system: a normal parking ticket machine which issues tickets to customers which are then handed back to an attendant in a booth to calculate hourly rates and pay into the 4th system – an electronic cash register. So task 1 has 4 systems.
Task #2. To audit parkades – we use our 5th system – an electronic vehicle counter to count all the vehicles that enter and leave the property. This data is then matched up with data produced by the previously mentioned systems – the cash register and the tag system. All this data is collected in person on print outs from each of these machines on site by a supervisor who takes the data back to the office for the administrator to laboriously compile it into a cute little excel spreadsheet for the landlord. (of course excel had to come up – this is our 6th system)
Task #3. Keeping the site safe and clean is a constantly evolving but mostly intuitive process. All our sites have CCTV cameras – which in a multi-story basement make them essential to keep an eye on things. The CCTV system is the 7th in my count that I can recall.
Summary
So, we have at least 7 systems and even more processes built around these in order to perform our 3 essential tasks.
There are a lot of moving parts, all of need to be well oiled to work. Any disruption to even one of them, makes the entire thing feel more like a DISorganization…rather than an organization. At the core of our Dis-Organization is outdated process and systems.
To summarize and close, we identified the main problems I’ll be tackling in this project and they are in the realms of People, Processes and Systems – The classic Business Analyst Trinity.
In the next recording I’ll go over this trinity in some detail and break down the problems we identified into smaller bits, by analyzing even single operational process we have. I’ll try and keep it brief and interesting, but it’s essential to break it down process by process so that they can fixed from the ground up – We don’t want to put a bandaid on a stab wound.
With that delightful image, till next time, thank you for listening!