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Strategies to Improve Business Efficiency

What is business efficiency?

Business efficiency is measured in terms of a business’s ability to produce output (e.g revenue, products, services) relative to its input (e.g. material, labour and capital). In simple terms, business efficiency is about making the best use of resources.

How to Improve Business Efficiency

1. Leverage Technology

Technology has played an instrumental role in creating lean and efficient processes. It can reduce and even eliminate duplications or delays in the workflow, helping businesses save time by automating specific tasks. To create efficiencies, it is important to identify and measure performance against an established benchmark. Creating Key Performance Indicators (KPIs) is the first step. Technology can be leveraged to measure and monitor the performance of employees, business divisions and the company itself. Utilising technology can help identify potential deficiencies, thereby providing management with an opportunity to rectify operational problems. Though technology can be expensive to implement, it generally has a strong return on investment because it allows businesses to improve productivity by cutting future costs.

2. Streamline Admin Tasks

A live answering service is a cost-effective way to eliminate phone calls and boost productivity. Instead of scrambling for on-the-go messages on scraps of paper, a live answering service streamlines the call handling process. It provides an organised methodology for answering calls while the team is busy, in a meeting or on leave. Services of these kind enable businesses to take back time without worrying about the tedious administrative tasks consuming their day. It also allows businesses to focus on the core objectives and tasks at hand, empowering organisations to exceed their goals and become a strong competitor in the market.

3. Reduce Interruptions

Reducing interruptions allows the team to focus on the core competencies that drive growth. One method of eliminating disruptions is to outsource. Common outsourced tasks include live answering services, recruitment handling, book-keeping, IT support, social media management and more.

Outsourcing can enhance efficiency and lower costs, creating an environment where companies have the freedom to focus on their core service/product. Of course, people more efficient when working on something they’re good at and it can be hard juggling the competing tasks that come with running a business. In recent times, outsourcing has become a value-add solution that allows employees  and staff to increase their flexibility, while focusing on what they do best.

Types of business efficiency

Numerous methods can be used to calculate business efficiency, some of which include:

  • Return on investment: financial measure of an investment’s profitability, represented as the ratio between net income and investment.
  • Process efficiency: the amount of effort or input needed to produce a product. For example, a business could examine the cost of shipping a product to ascertain if there are methods to improve the cost to income ratio.
  • Operational efficiency: measures the proportion costs incurred during a business operation.
  • Corporate social sustainability (CSR): considers the economic, social and environmental impacts of a business’s activities. Environmental measures may include eco-efficiency and energy efficiency. These metrics can aid strategic decision-making, including those concerned with supply chain management and capital investment. CSR can culminate in higher customer retention, improved employee morale and a stronger brand image.
  • Labour productivity: measures employee output during an average hour at work. This measure is influenced by the level of automation and technological tools that employees have access to.
  • Financial efficiency: determines the percentage of a company’s revenue that is spent on expenses.