top of page

The cost of inefficiency

Inefficiencies within business can cost much more than you may think. You're probably already aware of that, but what is the reality? What does it actually cost and what is the impact?

It may sound like a silly notion, but what cost are we actually talking about? Time? Money? Or is there something else? Well, in my view, this is as much about time and money as it is to do with the productivity and morale of your user base but it also is now starting to reflect in the reputation of your organisation. Time and money are quantifiable, the morale and reputation are less definitive and productivity can be very hard to pin ... or very easy.

To work out your current position, you need to understand what is possible and what tools you have at your disposal. Many Microsoft houses only focus on the big ticket items, Exchange, SharePoint, Office, Endpoint Management. These are all great things for sure, but there is so much more to the E3 and E5 stacks that have been so heavily promoted over recent years. How many products and features are there in the E5 stack? Well, it is about 9 pages of landscape A4 tables... it is huge, and almost every organisation we talk to has little to no comprehension of the tooling available, what those tools do and, in many cases, that they are already paying for them. Step 1 is to look at your licensing and work out what you have, use and what else you have access to. We're not talking about deploying technology for technology's sake, no, no. Once you have your viewpoint and know what you have, you need to understand what they can do and what challenges they can fix, even if you don't actually understand how to fix them yourself. Look at some simple under utilised tools... Co-authoring, planner, PowerBI, Power Apps & Power Automate, Delve, Lists, Booking, Virtual Agents, transcription, translation and automating of meeting minutes and actions... the list is comprehensive and goes well beyond those named above. Combine some tools together and you get a very, very powerful toolkit that can change your efficiency dramatically..

Step 2 is, for us, the interesting part. It is to find out who is wasting time within your organisation. This needs to be done in a 'help us, help you' way, you certainly don't want to come over as 'you're not working efficiently enough' or, and potentially even more damaging, as if you are automating to be able to cut headcount. Even though that might be a possibility. Look at your current ways of working, with a fresh pair of eyes now and keeping in mind all the time, what 'can' be done. Without knowing what can be done, you can't fully appreciate what processes can be simplified or automated. This reinforces how important step 1 is. They key here though is that the people who really know where the inefficient processes are, typically fall in to two areas, The do-ers and the managers, and they will be impacted in different ways. As a senior leader within your organisation, you will most likely be distanced or unaware of the day to day processes that are eating away at your bottom line.

Let's pick on the do-ers first. Those caught on the end of poor process are often the frontline workers, I.e. the do-ers, the people who just get things done, week in week out. They are, more often than not, also people who do not feel empowered or confident enough to speak up about areas they know could be done differently or better. You need to get access to them ask them what processes really take up their time, survey them, not in detail at this point, but encourage them to speak up. Be specific, 'what tasks do you do that consumes X hours a week or more of your time?' or 'what tasks do you regularly do that are manual or repetitive?' Believe us, they'll know more than your management team do!

The second group is your middle management layer, the ones who diligently produce the MI and reports for senior management. This group will often squirrel away for hours, trying to pull data together to present upwards, and who will they complain to it about, probably their peers, not their managers. This is where your more expensive inefficiencies will come in to factor. Having, a typically, expensive resource, cutting and pasting data and making reports look pretty is not a good use of their time, or anyone's really. Why leave your managers to do it manually, when you can pull the data in to one place, carve it up and present it nicely with virtually no human input.

Now that you understand this, you can start to look at the time and money impact. The maths are quite simple, each task, takes X amount of time, and that time comes at an hourly or daily cost. Not the salary cost, make it the employer cost so you get a true picture of what it is costing you. And with simple notion, you can now set both a time and financial cost against those tasks. Is that report, or process worth it.. Maybe, maybe not, but you need to look at a wide group, 1 person (at an employer cost of £30,000) with a task that cost £3,750 may not seem worth resolving, but make that 25 people with similarly inefficient tasks, and that rocks quickly up to £93,750, or 150 weeks' worth of time. Is that worth resolving? Most organisations think so.

The bonus with fixing these front line, day to day inefficiencies, is that your ROI is very easy to prove, you fix something inefficient, your time ROI (ROI-T) is instant, your financial ROI (ROI-F) is very short. You are not waiting for 6-24 months to get your return. Now that is nice!

On the topic of ROIs, one other thing to keep in mind is that, if you are paying an E3 or E5 subscription for M365, if you are only using those big ticket items we mentioned earlier, are you really getting a good ROI on what you have purchased? One to ponder...

So, what about the productivity, the morale and the reputational impacts. Those are most definitely harder to pin.

The productivity gain can also be calculated quite simply, you know how long the task currently takes, and you can work out how long it will take after the improvement. Typically you can see productivity gains ranging from 7-18% depending on the solution and the complexity.

The morale is a great bonus area. When you actively engage your staff in an exercise like this, you ask their opinion, solicit their ideas and suggestions, you will boost their morale without even making an effort. Why? Simple, they feel part of the solution, that they are helping make the company better, more productive, their opinions mean something. They are no longer a 'dogs body'. They are a valued part of the machine. When you improve a process, based on direct input from a user, and you make their life easier, and the expression of pleasure and gratitude is incredible. You are a caring organisation that listens to their real ideas. Put a price on that if you dare?

The last one is reputational and, is again, quite hard to pin. However, with technology moving on, making processes slicker makes your organisation look slicker. How often have you spoken to a partner organisation or vendor, and become frustrated with the speed of their processes. When you adopt the smaller, streamlining processes, that we talk about all the time, your organisation will look far more organised and professional to the outside world. Businesses frequently talk about how poor supplier A or partner B is... wouldn't it be nice to be spoken about in a positive light?

Inefficiencies come in all shapes and sizes, step one, find out what they are, and take it from there.

Comments


bottom of page