Inefficiency is a Business Killer

Inefficiency is not something that you plan for. It just happens. It happens when processes get too big, have too many moving parts, or are bogged down by excessive oversight. It happens when purposes for certain tasks change or are abandoned altogether. Other times efficiency has a different look to it and makes your optimistic projections look foolish. Whatever the reason, inefficiency is more the rule than the exception, and it’s costing your business plenty. This month, we take a look at what efficiency actually looks like and how to do your best to achieve it.

Employee Productivity

You want your business to be more productive? Join the club. Every business that has ever opened its doors has revenue-costing inefficiencies that they are forced to deal with. Some overcome them, some don’t. If your business wants to confront its inefficiencies, it has to start at the beginning and define what efficient looks like. Since inefficiency can come from any part of your business, it’s a decent idea to separate your search for inefficiencies into departments, or even specific workflows where you can define what efficient productivity looks like for that certain task. This definition is effectively your criteria for claiming inefficiency, and should only change if process or workflow changes.

Another determination is how much things change. Are you constantly tweaking your operational plan to try to draw as much out of each of your workers? Most changes that you make to workflows, no matter how small, are going to cause some initial inefficiency. Think about it: If someone has been doing something the same for a while and you ask him/her to do it differently to save time, it seems, unless you have evidence that it will work, that you are likely digging your own efficiency grave by changing a completely functional process to try to get more out of it. It’s true that most people work at the speed they need to be the most effective. If you think that you need someone who works faster, it’s not necessarily an employee-related problem, it’s likely a company-related problem.

In truth, most times, when a business thinks it is having a problem with their productivity, they mean that the people that work for them aren’t pulling their weight. The question becomes how do you quantify a productive workforce? Today, more and more companies are using Key Performance Indicators (KPI). These are measures that allow decision makers to evaluate strategic performance, as well as employee performance. Taking time to understand how your business, and your employees, can be most effective to help you meet your organizational goals is just as important as having the resources in place to do so.

One thing is for certain, making work harder on your employees is not going to result in better productivity. Your business is a second home to your employees, and the lion’s share of people show up regardless of what is going on in their lives. The happier they are to spend a quarter-to-a third of their lives working for you, the more you are going to get out of them. That’s not to say that there shouldn’t be performance metrics, and that you shouldn’t do everything you can to track their performance, but if you are making their lives outside of work better by providing the wages, benefits, and working conditions conducive for productivity, you will get more out of them.

Automation

In the productivity end, efficiency is built from having a good plan on what needs to happen, and executing that plan. If the plan shifts after some time, it's fair to expect that efficiency will take some time to catch up. Unless, that is, that plan includes automating portions of the workflow. People like to act that automation is working against people’s interests, but nothing could be further from the truth. Automation builds efficiency, which allows for more productivity, which allows for more revenue, and higher profits, and if those profits are reinvested, more jobs.

Automation works to build efficiency. That’s its one benefit, and it will cost you. There are many ways that a business can leverage automation into profitability. One is by utilizing a tool that automates all the little things. A properly working business typically has many different facets, and no matter how few people there are working these facets, they’ll have to be maintained. So, while payroll, accounts receivable, customer/vendor support, human resources could all be headed up by one person, with a software that automates a lot of the legwork associated with these tasks, that one person can accomplish everything listed above at a substantial cost reduction to the company. That’s not to say there isn’t cost, but when you can get people working rather than managing protocol, it substantially increases productivity throughout an organization.

Outsourcing

Contracting work that you cannot efficiently do yourself is nothing new. People have been paying contract-workers for a long time. You may find that you could get similar benefits at a substantial cost reduction by outsourcing some elements of your organization’s operations to an outside company. Where this process gets costly is when contractors are brought in to complete core parts of the job.

It stands to reason that if you offer products or services that your organization would have market authority in that space. Say your organization makes toys, chances are the people running the show, and the employees you’ve hired to physically build toys are all better at it than any outsourced company could be. Outsourcing is most beneficial when it is brought in, to complete aspects of the job where you lack expertise. This could be human resources, marketing, benefits administration, and of course IT support.

The IT professionals at Preferred know that technology is a major part of your business, and needs to function properly, and be protected. Our technicians have the experience and the knowledge to help you solve some of your most pressing operational inconsistencies. Call us today to learn more at 708-781-7110.