We all want the very best and latest technological innovations and want everything yesterday
all under the auspices of “efficiency”. While this mindset is meant to bring innovation and
speed, it often has the opposite impact within an organization. The concept of “legacy
systems” and having multiple “platforms” within an organization to try to find the “best in class
solutions” often has the unintended impact on a business adding inefficiency, waste, duplicity,
and copious amounts of data without generating any meaningful information.
In business, there are various interconnected systems that include, but not limited to,
Enterprise resource planning (ERP), customer relationship management (CRM), sales force
automation (SFA), digital marketing platforms, financial/GL systems, data reporting/mining
tools, billing software, shipping/receiving, inventory, point of sales, etc. etc. There are best in
class solutions for literally anything and everything and chasing the “best” individual solution
for any one of these areas can be daunting as technology is constantly shifting.
Of course, a company should never become complacent and not strive for innovation, however,
what are the costs of rapid “innovations” vs. engaging in a more complete and integrated
solution, even if you give up 20% of the “best in class” features? Let’s evaluate the negative
impact of the inefficiencies in having multiple disparate systems / databases / platforms. This
way you will be prepared to forecast and vet the potential new inefficiencies that you may
unleash in pursuit of greater more technologically advanced options.
Inefficiency costs money
Inefficiencies cost many organizations as much as 20 to 30 percent of their revenue each year.
Imagine what your company could do it if had 20 percent extra funds to funnel into customer
acquisition, research and development, training, digital marketing campaigns, etc.
Inefficiency is when you spend more money, resources, and energy than needed in order to
arrive at the same outcome. Defective products that need to be discarded, excess inventory,
bad data, rework, duplicate input, additional coding / development fees to write interfaces are
expenses that can quickly deplete your bottom line and are a very large opportunity cost.
Inefficiency wastes time
You may be able to squeeze every last cent out of a dollar, but there is no squeezing any
additional seconds from a day. Every minute squandered is lost forever, never to return. Time
spent waiting, duplicating effort of another, whether for a process to finish or for a manager to
tell you what to do next, is also time lost.
When it comes to efficiency, time is not just measured in minutes and hours, but also in
potential output. A disenfranchised or disconnected employee is simply not going to create the
same performance as a connected and fulfilled one in the same span of time.
Employee sentiment has a great deal to do with making the most of your company’s available
hours. Measures to make systems more connected, simple, user friendly, cleaner, safer, or even
less boring can go a long way.
Inefficiency reduces quality
As Six Sigma (6S) remind us, every defect or missed quality benchmark is an inefficiency.
Unhappy employees and older machinery tend to cause more errors than their more efficient
counterparts. Subpar quality control processes don’t catch errors in time, resulting in defective
merchandise potentially reaching customers.
Businesses don’t usually want to produce quality results 84% of the time, and they shouldn’t
have to settle for such numbers after undertaking efficiency improvements. Correcting
inefficiencies across a process can have a major impact on success rates in any business, and
get those quality results up.
Inefficiency damages morale
Rote or error-prone tasks are frustrating. If you have to perform them four or even eight hours
a day, you will not be particularly apt to go the extra mile or perhaps even to smile.
While it’s true that replacing more than one employee with a piece of machinery or an Excel
macro is sometimes the solution, a task that can be replaced with equipment was not
particularly fulfilling or engaging. Further, eliminating inefficiencies doesn’t always mean letting
employees go — they can often be redirected to more interesting and meaningful work
(really!).
Know what else hurts morale? A lack of trust, which is the direct result of an inefficient project
management process. When projects are announced only to disappear into the ether, when
milestone after milestone is set only to go by unacknowledged, and when upper management
touts dedication to goals that are not aligned with their actions, employees become all the
more disenchanted.
It’s a tough balance between innovation and integration so continue to keep a balanced
perspective as you seek to both integrate solutions and innovate approaches. We could all do a
better job thinking holistically in terms of how these innovations either upset or integrate with
current platforms and processes. If not, all you’ll do is add more inefficiencies, noise,
distraction and costs.
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