At the times of economic turbulence, a great number of companies seek ways to optimize costs and other resources and the efficiency of processes, which will help them survive during the economic crisis. To address these needs, organizations should improve operational efficiency.
What is it, and how to improve it? Let’s delve into these issues.
What is operational efficiency and why is it important to improve it?
Operational efficiency is the business practice aimed at increasing productivity, improving the quality of products/services, and at the same time minimizing waste. In simple terms, it’s about delivering more high-quality output with fewer resources as well as increasing profit while minimizing operating costs epicflow.com.
Improving operational efficiency is essential for the following reasons:
1. It optimizes the use of a company’s time and budget
Source: spendflo.com
Improving operational efficiency helps identify inefficiencies and areas for improvement, which contributes to more reasonable use of time and financial resources.
2. It increases customers’ satisfaction
If a company optimizes processes and operations, its employees can deliver high-quality output faster, which in turn contributes to increasing the customer’s satisfaction.
3. It ensures a company’s sustainable growth
High operational efficiency allows businesses to deliver more products/services, which will increase sales and ensure a company’s business growth.
4. It promotes an organization’s competitiveness
Operational efficiency contributes to a higher quality of products/services and faster delivery, which helps companies become competitive on the market.
5. It increases a company’s profitability
Operational efficiency contributes to cost optimization – e.g., a company eliminates waste of resources and/or reduces manufacturing costs. In addition, organizations with improved operational efficiency can deliver more orders. Both factors contribute to increasing a company’s profitability.
When working on improving operational efficiency, it’s no less important to rely on the right software – e.g., a resource management solution can greatly contribute to implementing the steps listed below. That’s why we’ll examine the ways to improve operational efficiency illustrated by the example of Epicflow – a multi-project resource management solution. Let’s take a closer look.
5 ways to improve operational efficiency
Source: bizjournals.com
Here are the most essential measures required to improve an organization’s operational efficiency.
1. Automate processes
One of the most efficient ways to improve operational efficiency is to leverage technology to automate routine repetitive assignments – in this case, employees can have more time for more advanced tasks that require human involvement. Automation can simplify a great number of processes – from sending email to leveraging advanced technologies in manufacturing. Automating as many activities as possible is useful for the following reasons:
- Employees utilize their time more efficiently;
- It reduces the number of human errors; as a result, there’s no need for rework and the output is delivered faster;
- It increases team members’ engagement making their work more interesting and letting them fulfill their potential.
A more advanced level is automating data analytics, which helps managers make more reasoned decisions, identify roadblocks, and optimize workflow.
When it comes to project and resource management, a resource management tool like Epicflow can automate task prioritization, suggest optimum resource allocation options, identify bottlenecks, test various decisions, and more.
2. Apply people-first culture
This implies focusing both on customers and employees. Focusing on customers, taking their feedback into account, and addressing their pain points increase their loyalty to the product/services delivered by a company. Being attentive to your employees and caring about them is no less important – people who feel valued at work are far more engaged and efficient. In addition, it contributes to employee retention so that an organization can be staffed with productive and committed employees. Both factors help increase operational efficiency and deliver better output.
How does a resource management solution contribute to people-first culture? For example, it helps take care of team members’ workload – it will not only reduce bottlenecks in the workflow but also prevent people from stress and burnout.
3. Facilitate collaboration between employees and reduce silos
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When departments of an organization are siloed, they can have competing objectives and conflicting priorities, which don’t contribute to overall productivity – there can be misunderstandings, mistakes, rework, and other waste of time and effort. Such organizations won’t be able to operate efficiently, so companies should facilitate collaboration and encourage employees to work towards a common goal.
Also, effective collaboration can improve operational efficiency in the following ways:
- Working together reduces silos and contributes to high productivity;
- Effective collaboration helps team members find ways to improve processes;
- Collaboration can also promote creativity and more effective problem-solving.
Apart from developing a culture of collaboration and supporting it from different perspectives, adopting a software solution can make joint work maximum productive. For example, Epicflow can bring even distributed teams together thanks to providing real-time updates as to the work progress and being a single source of truth for every project participant.
4. Identify bottlenecks
The first step in increasing the efficiency of the processes is identifying and reducing bottlenecks and spotting areas for improvement. Bottlenecks indicate that the process should be reviewed and fixed; they hamper the workflow and have a negative impact on productivity. If they are neglected, the situation can get worse, which will lead to more serious problems and low efficiency. It’s important that bottleneck detection and fixing is a continuous process.
In a multi-project environment, identifying bottlenecks is crucial due to dependencies between projects – even one of them can negatively affect the whole project environment’s health. That’s why one of the essential capabilities of a resource management tool is assistance in identifying bottlenecks. For example, Epicflow can analyze historical and real-time data and present it in a handy and understandable format so that a project/resource manager can use these insights to identify bottlenecks and inefficiencies.
5. Facilitate people’s professional development
Source: kineocourses.com.au
Continuous education and professional development is the key to increasing operational efficiency – employees should master new technologies, implement the latest best practices, stay updated regarding changes in the legislation, policies, regulations, and more. There’s one more important aspect of facilitating employees’ professional development – it increases their engagement and contributes to employee retention, as they feel that a company is investing in their career development and helps them become experts in their field.
How can a resource management solution contribute to people’s professional development? It provides visibility into the data on team members’ competencies and their level so that a resource manager or a team leader can quickly and easily identify those who require upskilling.
Conclusion
Let’s summarize the most important points of the article.
- Operational efficiency is the business practice that helps companies deliver more high-quality output with fewer resources as well as increase profit while minimizing operating costs.
- The most essential measures for improving operational efficiency are as follows:
– Automating processes;
– Putting people first;
– Reducing silos and facilitating collaboration;
– Identifying and fixing bottlenecks;
– Facilitating employees’ professional development. - A resource management solution can greatly assist in improving operational efficiency of project-based organizations.
