The technical definition of the word efficiency is "the ratio of useful work performed by a machine or in a process to the total energy expended or heat taken in."
If we think of businesses in these terms then efficient businesses should require less effort to be expended in order to produce more useful work. That is a situation that most business leaders would like to be in.
A business is nothing more than a set of processes that work together to produce a result; production, marketing, sales, finance etc. If these processes are of a higher quality, or are easier to perform, a greater outcome will be the result.
Increasing the number of customers relies on improving the marketing and sales processes, and increasing repeat business will rely on the operations and customer service processes to ensure that customers have a good experience, and are likely to purchase again.
Growing a business that has inefficient processes will lead to roadblocks
If volume of business increases greater strain is placed on the key processes, revealing their weaknesses. If problems are apparent in your business it is likely that one or more of the processes need improving.
One way to highlight where you business can really improve is to identify all of the key processes and map them all out, including all of the steps and people involved. Their inefficiencies should become apparent, and you can begin to optimise them.
Human involvement should be reduced to a minimum by removing as many manual tasks as possible and implementing systems that allow automation of these steps. Individuals should be free to do creative work that improves the business instead of mindlessly ensuring that processes work every time.
People (especially business leaders) should work on the business, rather than in the business.
Businesses can grow to a certain point despite inefficient processes
When you’re a small and agile start-up it's easier to adapt and make changes to processes in order to find what works. Key processes don’t need to be documented and standardised at first because you’re still figuring out what they are. However, what works when you're small, may have faults that will be exposed when you grow.
As new employees come on board and departments grow, it becomes increasingly important for business processes to be standardised, for collaboration to be possible, and for key documents and data to be easily accessible to everyone.
Old processes can soon become outdated in a growing business, holding it back from further growth and becoming a source of problems.
How can technology help businesses to improve efficiency?
Many processes can be simplified with technology by increasing the amount of automation, or reducing the amount of work from individuals to ensure that processes are carried out.
For example, rather than managing all HR related issues on paper or in spreadsheets, systems exist that allow for a big reduction in effort spent on managing HR.
- Employees can see how many days they have left to take rather than asking you.
- Click a button to approve a leave request and have it go into the relevant calendar.
- Have automated workflows that notify you when number of sick days have been high, or when it's time to schedule a review.
Businesses can improve their sales process by making use of a CRM system that enables automated emails, tasks, assigns leads to people and automatically creates follow up reminders etc. all whilst sending out marketing information to the prospect to nurture them towards a sale. The time saved versus trying to do all of this without a dedicated system is vast, and the effectiveness of the process is also significantly improved.
Accounting software is far more appropriate for book-keeping, and integrates nicely with other areas of the business such as sales and purchasing (for example automatically generating invoices and tracking expenditure), yet businesses continue to use Excel to do all of their accounting and rely on people to communicate transactions internally.
Office 365 improves business efficiency as it creates a centralised document storage system which allows for the right level of access for everybody. No more email attachments and multiple versions of files saved in different places. You can set who has access, and one version of a file stays up to date and can be worked on by multiple people simultaneously.
Culture changes go hand in hand with technology changes to improve efficiency
Keeping employees productive is crucial to business efficiency. Only about 60% of work hours are spent productively.
Interruptions are a key cause of wasted time. It takes on average 16 minutes to regain focus after an interruption (people walking up to your desk, emails coming in, non-essential meetings).
Businesses can keep employees productive by tackling the interruption culture. Remote working should be encouraged where possible as productivity often improves outside of the office.
Email should be kept to a minimum and ideally only processed at set times in the day and ignored outside of these times. The need to always be attached to email is not conducive to getting quality work done.
Walking up to colleagues’ desks should be eliminated and emails sent instead; then handled at the predetermined times. For more urgent requests, business instant messaging can be used.
Who's Responsibility is Process Improvement?
Some businesses have a CIO or COO who is responsible for improving the business' systems and information. In others, the Managing Director or CEO may oversee this.
Much value can be derived from delegating this job to an outsourced expert in technology and business process optimisation. There are firms who offer Business Process Improvement as their main service. Your technology partner is best placed to offer this advice as they already know your business, the technology you use, and they have experience with new solutions that improve efficiency.