Every business has overhead costs, including fixed expenses such as rent and business insurance. There are also monetary and intangible costs associated with employees, training, marketing and other areas.
Too often, however, businesses have inefficient processes that create unnecessary expenditures or waste other precious resources, including employee time and attention that could be better spent elsewhere. These inefficiencies can also slow operations, cause errors, and lead to employee frustration and burnout.
Reducing “resource burn” – wasted time, money and other resources – is vital to your business’s long-term success and survival. We’ll explore the most significant operational inefficiencies and time wasters that cost your company precious resources, and explain how to streamline your processes.
The biggest business inefficiencies and how to reduce them
Here are four of the biggest sources of business inefficiencies and how to prevent them.
1. Falling into social media black holes
Social media marketing is an essential marketing plan strategy for businesses that cater to business-to-consumer (B2C) and business-to-business (B2B) audiences. A robust social media presence on multiple channels – including Facebook, Instagram and Twitter – is no longer optional.
However, businesses risk massive inefficiencies when attempting to harness the power of social media. Avoid these common missteps:
- Pursuing a social presence everywhere. Too many businesses fall into the trap of thinking a successful social media strategy means engaging on every social platform. Although it’s important to have a presence on multiple channels, not every platform gives you a direct benefit. For example, companies in the industrial solvents or software-as-a-service (SaaS) industries don’t necessarily need Snapchat or Instagram accounts but may benefit from a presence on LinkedIn and Twitter.
- Buying engagement on social platforms. It’s become common practice for many marketers to buy social engagement by paying for likes, post boosting and new followers. This is a waste of time and money because you’re likely paying for bots that won’t engage with your social channels. It also makes it challenging to obtain accurate metrics, and your accounts may lose credibility.
- Jumping on social trends. As companies try to maintain a competitive edge, they may think they need to jump on every new social trend. The reality, however, is that this bandwagon effect is far from useful. Spreading your resources too thin on unhelpful avenues can quickly kill your marketing budget and hurt your business.
How to fix it: Measuring data is the best way to avoid social media mistakes. Most businesses benefit significantly from social media analytics that offer insight into visitor engagement, follower behavior, shares and much more.
With a thorough understanding of the channels and campaigns that best suit your business, you’ll stop overspending and start directing your marketing team’s time and energy more effectively and constructively.
Tip: To improve your strategy, consider hiring a social media manager to create a posting schedule and to monitor metrics such as engagement, clicks, follower counts and traffic.
2. Using too many software tools
As with social channels, many executives assume it’s best to have as many software solutions as possible. The SaaS model allows companies to download new software quickly and easily. However, a glut of software tools can be a significant waste of resources, for these reasons:
- Decision makers don’t see the big picture. IT managers and chief information officers (CIOs) understand a company’s technology, but they may not have a good idea of what’s needed for daily use. On the other hand, a department head may want a new tool and not realize a current tool already has the capability they need.
- Multiple tools multiply costs. While many software services have reasonable monthly subscription fees, costs grow quickly when you start subscribing to dozens of tools.
- It creates a logistical nightmare. Adding a plethora of tools and applications creates logistical and management challenges. For example, someone has to manage each subscription and handle multiple software updates and potential vulnerabilities. Your IT team must oversee accounts, manage permissions, and track new and departing employees.
- The team likely won’t use every tool. Having excessive tools means some are probably not getting used to their full potential, meaning the company has wasted money.
How to fix it: Stop the jumbled approach to SaaS integrations and create an efficient, centralized management system for your software tools. For example, Pipedrive, a software company with over 400 team members, began using a platform to map and centralize its app administration. The company found that this change saved the IT team about 1.5 hours per offboarded employee.
FYI: Ensure that your CIO and CMO and other department heads work together when adding new software tools. This collaboration will likely yield the best tools and reduce redundancies.
3. Holding too many meetings
Meetings are a hallmark of corporate life. Managers need to communicate with teams or individual employees, teams must coordinate ongoing projects, and weekly company-wide meetings are standard.
However, meetings are often unproductive – and the more you have, the more likely it is that some are unnecessary. An overabundance of meetings can be one of the biggest drains on productivity and, therefore, your profit-generating capacity.
How to fix it: The obvious answer is to be more discerning about the meetings you schedule. Businesses can replace many meetings with emails, chat channels and communication via internal communication apps. The right communication channels can reduce the need for face-to-face meetings, and your team won’t have to stop working to communicate.
When meetings are necessary, make them more productive by having a set agenda, specific goals and a preset end time.
Did you know? To make your online meetings more productive, test all tech elements ahead of time, appoint a meeting moderator to keep things flowing, and cap the time on your meetings to boost efficiency.
4. Relying on ineffective outsourcing
Outsourcing is a game-changing trend that allows businesses to delegate duties to contractors. When done right, outsourcing can lower costs, free up your team for high-value tasks and reduce hiring needs.
However, too much outsourcing can cause problems, including the following:
- Decreased product quality. Leaning too heavily on outsourced work can decrease overall product quality and force you to spend time fixing work an in-house team member could have done more effectively.
- Damaged reputation. Shoddy work squanders current resources and affects future revenue if your reputation is tarnished.
- Oversight requirements. Someone has to manage the outsourcing process and contractors by monitoring projects, timelines, quality and more. You’ll need a clear outsourcing strategy, which many companies don’t factor directly into their costs.
How to fix it: Be discerning about what you outsource. Focus your resources on completing work in-house, and find outsourcing services with a superb quality record to ensure you’re not double spending on every outsourced contract. [Read more about how to use outsourcing to grow your business.]
More ways to stop burning resources and wasting time
In addition to avoiding the inefficiencies outlined above, consider the following tips to improve operational efficiency:
- Break organizational silos. In a business context, a silo is a department that operates without much interaction with other departments. When departments are siloed, they end up focusing on the “small picture” instead of what’s best for the company. For example, say a shipping department with its own profit and loss statement wants to use a slower means of transportation to save money. If it doesn’t communicate with the sales department, the sales team can’t set the right shipping expectations, and customers may grow frustrated when their orders don’t arrive.
- Update old, clunky software. If your company has a legacy system that requires employees to enter data more than once or use workarounds to accomplish their tasks, implement newer software to reduce frustration and save time.
- Increase managerial support. Some managers see themselves as department disciplinarians who report to the executive team. However, they can vastly improve their department’s productivity and morale if they support their team, see where they need help, answer questions, and act as advocates to get things done. Hold managers to this higher standard to improve manager-employee relationships and increase productivity.
- Allocate tasks to the right people. Many companies require their salespeople to perform tedious tasks such as creating detailed expense reports, checking product availability and monitoring shipment details. However, these salespeople’s time would be much better spent generating new revenue, especially if you have a high-ticket product. Instead, hire support staff to handle less-critical functions, and let the sales staff do what they do best.
- Centralize your customer information. If you need to access various systems to understand a customer’s account, you’re wasting time. Use a robust customer relationship management (CRM) system that stores all customer information centrally. Ensure it can run CRM software reports and interface with other systems, such as those you use for accounting, marketing, shipping and inventory.
- Hold everyone on a project accountable. Without accountability, projects can take forever and go nowhere. Assign a team leader, and use project management software to keep everyone informed and aware of their responsibilities.
Reducing waste is a conscious choice
Reducing waste requires a conscious effort. Identifying areas where your business is not performing well may be challenging, but taking action to resolve them will start paying off immediately.
Focus on aspects of your business that are not delivering the intended results, and find ways to replace wasteful processes with more efficient solutions.
Jennifer Dublino contributed to the reporting and writing in this article.