Inefficient processes cost businesses time and money. A bad process here and there may not seem like a big deal. But think of each inefficiency as a tiny hole on the side of a boat.
One little break in the boat’s structure won’t have much of an impact on the boat as a whole. Some water will trickle in, sure, but it would take a very long time for the boat to sink.
When your business has multiple inefficient processes, it’s like having little holes scattered all along the edges of the ship. Water will be stream in from all sides. Over time, entire sections of the boat will flood. And, eventually, the whole thing will sink!
Moral of the story: having too many poor processes will tank your business.
At RTG Solutions Group, our experts isolate the inefficiencies that are stealing revenue from our clients. And with our proven methodology of people, process, and communication, we help them turn things around. Today, we’re sharing our knowledge on how to find and fix inefficient processes.
Here’s what you’ll learn in this article:
- How inefficiency is impacting business performance in 2021
- How to spot inefficient processes in the workplace
- Four ways to fix inefficient processes
How inefficiency is impacting business performance in 2021
If your business is struggling with efficiency, you’re not alone. Despite the impressive array of tools, software, and innovations that exist today, organizations still miss out on revenue due to poor or undefined processes.
Ironically, snazzy software and tech innovations can often make things worse. New technology on poor or outdated processes just makes the bottlenecks and chaos worse.
How is that possible? Well, let’s say your organization invests in a new Enterprise Resource Planning (ERP) system to centralize its operations.
If your processes are cumbersome, with unnecessary or complex steps, laying new technology on top of bad processes is a recipe for disaster. In addition, it’s critical to have all processes documented before and after you implement the ERP.
Without proper documentation, a crucial part of each process is going to be missed, duplicated, or compromised when your ERP is rolled out. Additionally, if employees are not aware of (or don’t follow) the new processes, you won’t see a return on investment for that ERP.
In short: messy processes + new software = messier processes that are harder to fix. Integrating new technology with streamlined processes significantly improves the ROI.
Unorganized software implementations can create or accelerate a vicious cycle of inefficiency. See, inefficient processes lead to chaos and disorder in the workplace. As well, time delays and poor communication can negatively impact such operations as inventory management, hiring & onboarding, sales, and operations across the organization.
The inefficiency takes a toll on your entire workforce and the bottom line. Without addressing business processes, the cycle of inefficiency will continue throughout the organization.
But poorly implemented software is far from the only cause of workplace inefficiencies. Just look at these productivity statistics reported by Finances Online:
- Companies lose $500 billion annually because of workplace stress and confusion
- 40% of workers report lost productivity due to multitasking
- 34% of employees report that low company morale increases stress and reduces productivity
- Employees waste, on average, over 2 hours a day on non-work activities
- 52% of employees report increased stress levels because of inefficient workplace communication
- 85% of workers waste 2 to 3 hours per week searching for information
How to spot inefficient processes in the workplace
Because inefficient processes can – and will – hurt your bottom line, it’s important to know how to spot them. While some inefficiencies are harder to pinpoint, here are some tell-tale signs of inefficient processes in the workplace:
- Employees have to input or document the same information in multiple locations
- Processes are duplicated across teams
- Employees frequently report that they did not receive an important piece of information
- Many employees have a different process for the same task
- Mistakes are common
- Your organization performs poorly on audits or compliance checks
- Your team members have long, frequent meetings
- There is often miscommunication across departments
- Your IT team is overworked
- You don’t have documented Standard Operating Procedures (SOPs)
4 ways to fix inefficient processes
Conduct a Needs Assessment
A needs assessment is a team effort, usually lead by a facilitator, to map out how a specific area of the business functions. Also referred to a Needs Analysis, it helps the team identify current inefficiencies and bottlenecks, create new-and-improved processes, and measure the impact of your process improvement efforts.
When conducting a needs assessment, you start by analyzing the current state. How are things currently functioning within a process. At this point, you create a process map containing all the steps, who does what, how long each step takes, and what roadblocks and detours exist along the process.
Creating process maps lays everything out on the table (literally). It gives you a visual representation of how things are currently done – and most importantly, it shows you were where the inefficiencies are occurring.
Mapping current processes sets the foundation for the rest of your needs assessment because it highlights bottlenecks or unnecessary steps. Once you identify those pain points, you can prioritize the projects and mobilize resources and a timeline to fix them.
Other steps involved in a Needs Assessment include:
- Developing an ROI model to justify upcoming expenditures
- Creating a scope of work to define which issues you will (and won’t) be tackling
- Laying out a schedule for your process improvement
- Setting pre- and post-improvement Key Performance Indicators (KPI) to measure the impact of your process overhaul
Need to conduct a needs assessment but don’t know where to start? Check out this article on 9 Priorities for Conducting a Needs Assessment.
Document Standard Operating Procedures (SOPs)
Standard Operating Procedures, or SOPs, are your organization’s way of doing things. In other words, they’re your processes. Every workplace task that plays a role in business operations should have a documented SOP. Such SOPs include processing payroll, on-boarding new employees, and managing inventory, to name but a few.
If your processes aren’t documented, they won’t be efficient. It’s that simple! This is because well-documented SOPs are crucial tools for employee training, regulatory compliance, implementing new software, and successful completion of everyday tasks.
The first step to improving inefficient processes is to document them. You might be thinking, if you’re going to upgrade your processes anyway, why should you take the time to write them all down? This is because the process of documenting SOPs gives you valuable insight. When you pore over your current processes, you’ll be able to pinpoint exactly where the bottlenecks, redundancies, mistakes, and other inefficiencies are happening.
Additionally, with continuous improvement practices, SOPs can continue to be refined and improved upon.
Systems integration is one of the best ways to cut out inefficiencies and increase productivity. Nowadays, most organizations rely on multiple pieces of software for their daily operations. A surprising amount of time (and revenue) can be lost when those systems don’t communicate with each other.
Systems integration ensures continuity of information across all platforms. As a result, you can eliminate redundancies, reduce mistakes, and boost inter-departmental collaboration.
As an added benefit, integrating your systems automates processes that you’d otherwise have to do manually, such as e-mailing a team member to let them know that you’ve edited a document.
However, before jumping to buy new software to integrate, don’t skip creating a business requirements document. A requirements document is essentially a guide for all-things relating to a new software decision. It stores vital information, such as:
- Why the software/technology is necessary
- How the software/technology relates to the company’s overall goals and strategy
- An outline of all current company processes that will intersect with this software or system
Once you put together a requirements document, your IT team will have all the information it needs to set up the new system, so that it actually performs the tasks you need it to do.
Invest in Employee Training
Training your employees is a vital part of process improvement. You could have the most efficient SOPs in your industry. But if your employees don’t know or follow those SOPs, they won’t make a difference.
Good training informs your employees about company processes, values, and more. As a result, it empowers your team to maximize efficiency.
Organizational inefficiency leads to chaos, frustration, and lost revenue. Once you learn how to spot poor processes, you can start to fix them.
Needs assessments, SOP documentation, systems integration, and employee training are proven ways to address inefficiencies and boost your bottom line.
Is your business overwhelmed with poor processes? At RTG Solutions Group, our methodology yields measurable results and improves efficiency across the entire organization. Contact us today to level-up your efficiency and unlock hidden opportunities for growth.