7 Ways Operational Efficiency Can Help Reduce Costs In Your Business


We’ve discussed the idea and importance of operational efficiency in Operations Design: Why It Is Important And When To Start Thinking About It? as well as in Organizations Need to Breathe. To reiterate the key message of those articles, operational efficiency is essential to run a fluid operation, which will maximize the productivity of your organization. In those articles I provided an analysis of the importance of thoroughly understanding the way that your business operates, to develop an efficient operational design. However, in this article we’ll go a step further, with seven tangible resolutions to yield operational efficiency and, subsequently, cost reduction in your business. Remember this key message: operational efficiency should ultimately reduce costs and increase revenue.

#1 Paper? Get rid of it! #Paperless

In addition to the fact that we need to save the trees, paper exposes businesses to human errors more so than an electronic operation. After all, we are only human. We may forget to sign on all the dotted lines or complete a form appropriately. We may misplace documents. These errors require time to remedy and we all know the phrase “time is money!”  Improving Operational Efficiency provides insight that delivering and filing documents electronically, additionally, removes costs related to printing and mailing. For businesses that perform a lot of mailing, such savings are significant.  Not only is electronic faster, it’s more efficient and accessible to those who require access and, with the ability of encryption, is more secure for confidential information.

#2: What your customer doesn’t know won’t help you

Your customer should always be knowledgeable of your services and/ or products. If your customer is not aware of what you’re selling or informed of developments, logic follows that your service will have some trouble being sold. Whether it be a newsletter or social media subscriptions, find ways to ensure that your presence is felt by your target customers.

#3: Ask for help when you need it. Outsource!

Outsource when you need to. You may find that it is more efficient to bring in experts (such as consultations) to do what your business may not have the resources to do. Once again, this saves time and money. Megan Sullivan’s article 8 Ways to Reduce Operating Costs provides marketing as an example of when companies opt to outsource. Spreading your business too thin could ultimately hinder productivity.

#4: Define your operations

A key to an efficient operation is one that is solidly defined, outlined, communicated, and followed. How to Reduce Operational Costs is an article that aids well with understanding this point. It illuminates that businesses run the risk of spending on the hire of more employees to complete projects, if there isn’t an efficient process put in place. The article continues to explain that sometimes a smaller team can accomplish more.  “Too many chefs spoil the broth.”

#5: Automated Systems

As our society becomes more and more technologically advanced, our world becomes smaller as everything feels nearly instantaneous. Automated systems make processes faster with the click of a mouse. As mentioned earlier, it also reduces human errors which saves operational costs.

#6: Don’t do the same thing twice!

Again, save time! Redundancy is another issue that can come with a price. This can be in the form of wasting time by completing something more than once, or by making the same payment more than once. It can be avoided with efficiency, meticulousness, and communication. Develop a way to distinguish work that has been completed and work that has yet to be.

#7: Keep records efficiently

Lastly (on this list), keep records and uniform the convention for saving documents. There are many variations for saving documents, they usually include the date and name of the document. Pick one and stick with it. Administration may seem like a small detail, not something that warrants a lot of attention. However, if there isn’t a unified naming convention, someone else who may need to access the documents may have trouble navigating the files and finding what they need. You see how this hinders productivity? The small details are significant as well.

Take each point into consideration, as they can help significantly reduce costs in your business. Can you think of more ways that operational efficiency can reduce costs? Please share them in the comments section!

About the Author: Hazel

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