If inefficiency becomes a problem, changes may be needed
March 24, 2014 00:00 By Dr Yanyong Thammatucharee
Operational inefficiency can become a critical obstacle for business success. Some companies have developed a lengthy procedure over years of business growth until it becomes redundant and inherent waste.
For example, salespeople at the shop may be concerned with certain reports and have to spend a lot of time completing manual sales reports required by the head office. Instead of spending time on the sales operation, shop management and taking care of incoming customers, these salespeople have to spend a significant amount of time on paperwork even though the company may have installed a good computer system.
Once management realises that it is time to make some changes to the system, several alternatives can be considered.
Self-improvement: This may be done in the form of a committee or task force consisting of key management people who will meet together to determine the target and action plans.
In many cases, this approach turns out to be a failure because of lack of time and determination. Once the project develops to a certain extent, it can stop without any progress until the next round of the discussion.
Hiring a consultant: This is another approach that many companies apply to fix a long-standing problem. Unfortunately, as consultants do not have authority in the organisation, driving change through internal manpower can be hard. It tends to end up with neglected advice and suggestions.
Changing the software: Some companies decide to acquire new software that is perceived to be better and more effective. But in many cases, the expected results do not happen because people continue working in the same old way.
After applying several methods, some companies may think of redesigning their current system by incorporating necessary changes into policy and procedure. It is important that this initiative receives full support from the top management. It can involve company-wide communication about the change and its necessity. The following are areas that may be affected by the system-redesign process.
Task redesign: The redesign process should start from understanding the business processes, that is, purchasing, selling, collection of payments, investment and so on. The next step is defining the objectives of each process and clarification of each task to see the room for improvement, taking into account the best practices and concepts, such as lean and internal control. Then the most efficient and effective process can be developed for finalisation and decision-making by the top management.
Organisation redesign: From the existence of each task, the system designer has to propose the suitable organisational format that can best serve the work flow and support collaboration among relevant tasks. Some new sections may be needed or some existing ones will have to be removed to form a new organisation chart. The design process should take into account the elimination of waste and balance of workloads under each function.
People redesign: Putting the right people into the redesigned organisation is essential in ensuring proper implementation. If some of the existing people are qualified for new roles and can be rotated, it would be easier for changes to be made. However, in some cases, the company may need to replace the existing personnel with the new people who can perform the tasks as expected.
The three interrelated factors above should be examined and developed into a new system that can serve the requirements of the business operation. There should be a balance between each combination in consideration – people and task, task and organisation, and organisation and people.
With a well-designed system and effective implementation, the company should be able to respond competitively to a market environment that becomes more and more dynamic.
Dr Yanyong Thammatucharee is senior vice president for accounting and finance at Central Marketing Group. He can be reached at email@example.com.