5 Strategies To Achieve Operational Efficiency
Operational efficiency is the goal of every organization and measures a company’s overall health. It describes the organization’s capability to use its resources, including time, money, and staff, in the most optimized way. A company that has attained optimal operational efficiency didn’t get there by chance. In fact, taking a strategic approach will ensure that operational efficiency is reached faster and more effectively. Below are 5 strategies that can be implemented to achieve operational efficiency.
This article will cover the following topics:
- What is operational efficiency?
- What are the risks that inefficient businesses face?
- How is operational efficiency best achieved?
- How PayEm can help you to meet your objectives
What is operational efficiency?
Operational efficiency is the measurement of a company’s input vs. output. Input relates to the time, money, work, people, and resources spent to produce the company’s products and services. In comparison, output relates to the results gleaned from specific systems and processes within the company’s workflow. Measuring and improving operational efficiency helps a business stay more productive and better achieve its profitability goals within desired timelines.
When measuring operational efficiency within the marketing industry, the input would be advertising, time, ad spend, and other resources. The output would be the result of the marketing initiative. Measuring and maximizing operational efficiency helps an organization get the most value for its resources.
What are the risks that inefficient businesses face?
It can be challenging to focus on operational efficiency when there are many immediate concerns to address. All too often, operational efficiency objectives go by the wayside as employees struggle to stay afloat and catch up to the workload ahead of them. They end up defaulting to the way they have always done things because it’s too challenging at the moment to implement new systems. However, the risks associated with not taking steps towards optimization are significant. Ultimately, inefficient businesses face higher costs, unnecessary expenses, and both employee and customer dissatisfaction.
Additional risks of inefficient operations include:
- Longer wait times for services and products
- Greater transaction times
- Subpar customer satisfaction due to reduced quality and longer waiting times
- Reduced product quality
- Dissatisfaction among employees as they face mounting frustrations
- Higher costs due to errors and delays
- Fewer profits as a result of inefficient processes
Identifying the results of inefficiencies within company processes and systems is the crucial starting point to developing effective solutions. Once bottlenecks and blockages in the workflow have been pinpointed, it is easier to pivot and uncover the steps needed to rectify these inefficiencies. Data analytics provided by automated platforms are one of the most effective ways to identify potential improvements. Once the processes are quantified via measurable data, potentially provided through ERP software, significant improvements can then be made.
How is operational efficiency best achieved?
Analyzing the best methods for achieving operational efficiency begins with examining the current state of affairs and noting what changes are needed. By making small changes across all areas, systems, and processes, large-scale improvements can be seen over time.
The first step in achieving operational efficiency is analytics. By analyzing the current status of systems within the organization, decision-makers are in a better place to determine what steps to take to make much-needed improvements. Begin by asking employees and teammates what is working in the day-to-day cycle and what bottlenecks and hiccups they are experiencing. Reviewing historical data on a per-project basis is also instrumental in determining what worked and what areas need improvement.
Analytics is a component of automation and can be achieved using technology platforms to pull critical data from existing systems and processes. In addition to data analytics, however, automation can contribute heavily to operational efficiency in other areas. Automation can help streamline operational efficiency by organizing processes and communication through one central platform. Basically, cutting-edge automation is key to meeting operational efficiency goals in any industry, while also reducing the potential for human error.
In line with automation and analytics is the implementation of technology that can provide both of these factors. Technology inherently offers automation with built-in analytics features to help businesses become more efficient. Technology is the most important consideration for organizations seeking to improve their operations. Some of the critical technologies that directly improve operational efficiency include mobile technology, collaboration technology, data collection technology, and automation technology.
4. Define measurable strategies
Once hindrances to optimizing efficiency have been identified, the next step is to define measurable strategies to ensure success. This means setting goals that can be measured, defined, and tracked to ensure the objectives have been reached. Use the SMART - Specific, Measurable, Attainable, Relevant, Time-related method to set and track goals effectively. This keeps your team focused on the end goal and provides them with a reasonable method of evaluating their progress along the way.
5. Mobile advantage
Mobile technology offers distinct advantages for businesses in the form of immediate communication. Timely communication with primary business partners, suppliers, customers, and departments can significantly enhance the level of operational efficiency that a business experiences. An added advantage of mobile technology is that the team can work on the go and, when needed, access key information to make in-the-moment decisions. This ensures that the workflow is never impeded due to a lack of communication.
Meet Your Objectives With PayEm
One simple solution that combines the aforementioned strategies into a streamlined platform is PayEm. PayEm is cutting-edge financial technology platform that allows businesses to increase their levels of operational efficiency in many ways. Organizations can achieve their goals faster and more effectively by implementing effective technological solutions such as PayEm into existing systems and processes. Some of the ways that PayEm can help to meet organizational objectives include:
- Insights- A unique insights dashboard provides real-time metrics that can be accessed anywhere and used to make critical and time-sensitive decisions.
- Analytics - With a built-in analytics function, VPs can easily view and analyze data and forecasts.
- Budget - Optimizing business efficiency becomes simplified with built-in budgeting and limit setting per vendor.
- Cost Control - Easily manage costs such as monthly subscriptions and automatically adjust them as needed based on usage and ongoing need.
- Integrations & Approvals - Quickly establish connections between the PayEm platform and your ERP. Once achieved, businesses can keep everything up-to-date with automated syncs after every transaction and approval. Moreover, companies can implement custom approval flows and policies in order to streamline overall processes.
With one streamlined platform, it will be easier than ever to improve your organization’s operational efficiency. PayEm allows your business enhanced control, improved automation, and the insight needed to make the best business decisions. Contact PayEm’s experts for a commitment-free, no-cost demo of the platform.
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