When businesses look to make cost-savings in their business, they often look at what they can cut back on. Doing this will have an immediate and desired result on the savings they need to make but in the long-term, if the decision hasn’t been well-thought-out, the business will suffer. For example, if the headcount is reduced across a number of teams, it will result in poor performance because the volume of work hasn’t decreased. It may also mean that employees are working overtime to cope with the increase in workload which will cost the business more money. Making cutbacks isn’t always the answer. Instead, businesses could choose to shift their focus from ‘cutting costs’ to ‘improving efficiencies’.
Efficient processes help a business save money and generate an income through cost savings, cost avoidances and income generation:
- Cost Saving
Streamlining processes typically result in there being less to do. The aim of this exercise isn’t to cut out important steps within a process but to identify steps that either add no value or could be automated. Automating parts of the process is an excellent way of reducing manpower within the process. It also improves accuracy as the automation is likely to remove human error. By cutting out non-value adding tasks and implementing automation where possible, employees can focus on the value-adding tasks and increase the volume of work they process.
- Cost Avoidance
Efficient, well-mapped processes and standards provide employees with the guidance needed to complete their work. These form the basis for consistent ways of working across teams, provide the foundation to measure employee performance and should increase the quality of output for the business. With well-mapped processes and standards in place, mistakes should reduce; resulting in fewer customer complaints. This reduces the manpower required to deal with complaints, any re-work required for mistakes in a product and the cost of financial compensation for complaints.
- Income Generation
When customers are satisfied, they are more likely to use services again. They are also likely to refer business to others they know. Repeat business and referrals will increase sales and provide greater income generation.
Process efficiencies take time to do thoroughly and embed within a business but the long-term benefits of having these in place are huge. They help you both save money and generate more income. They provide happier more satisfied customers and a motivated, focussed workforce.
If you would like external support with your business processes, we work in partnership with businesses to maximise your day and get your business ready for growth by driving efficiencies. I offer a free 60-minute consultation which provides you with clear next steps for moving your business forward. Get in touch.