How to avoid: The 3 big costs most businesses incur today without realizing
As any growing business, we at Signority are constantly looking for ways to become more efficient in our operations. In a recent chat with our friends at Indellient — experts in business process management — we explored internal areas and processes to improve our business. Katie Hulan, their Marketing Manager, was gracious enough to accept our invitation for a guest post to share her insights for other small businesses.
As businesses, we are often fixated on the next immediate business need – shipping the next version of our product, making that next big sale, fixing that bug, applying for funding. These outward-facing or revenue-driving activities are the first to be given resources as they are directly related to the success of your business. But what about what’s happening internally? Are you set up to be as efficient as possible? Believe it or not, business success comes quicker when your team is set up to be successful first. And that, my friends, is where business process management (BPM) comes to play – it is a systematic approach to making the workflow of an organization more efficient, effective and capable of adjusting to an ever-shifting environment. A business process is an activity or group of activities that will achieve a goal of the organization. So, when your people, who, by the way, are your greatest asset of the company, are equipped with productive processes and effective tools, they are better prepared to meet the goals of your organization.
There are many costs that an organization can incur if the business process management is not implemented.
- First, the cost of customer support. Customers can easily get discouraged when they do not receive services efficiently and satisfactorily. Due to poor organizational workflow and not adapting to the changing environment, the customers will lose morale and migrate to those that have adapted to modern technology and with efficient services. In today’s world, you know that when customers complain about their dissatisfaction, they don’t complain to you but to the public instead. And the customers are good at this! Allow me to explain. The increasing popularity of social networks acts as a forum for frustrated customers to talk about their awful experiences with given companies and it spreads like wildfire! Now, this is very costly to the business since it implies the loss of loyal potential customers, loss of reputation, and profit.And when the organization fails to meet its financial goals, it cuts costs by reducing the number of employees. Cue the loss of morale and confidence because job insecurity takes away their focus from work. Obviously, the moment there is a shift in attention, productivity declines and more absenteeism follows and customer complaints rise. Thus it becomes a fierce cycle.
- Opportunities! Missing opportunities can be disastrous for businesses. Indecision, or, not taking advantage of the chance to make a decision, leads to its own costs and those costs more often are beyond that of a bad decision. Bigger costs of inaction are the cost of missed opportunities. One of the major factors that lead to missed opportunities is the failure to adapt to the ever-changing environment, a role that Business Process Management accomplishes very well. It is commonly said that opportunities come once in a lifetime and therefore should be seized immediately. You may not calculate the exact cost of missed opportunities, but it is great. This is because, without an organized effort to find them, the opportunities to increase the performance will go un-noticed.
- Engaged Employees. A study conducted by the Gallup in 2015 shows that 32% of U.S workers were considered engaged in work. Most of the employees were not engaged that is 50.8%, while the 17.2% were actively disengaged. The detailed research of Gallup reveals that the engagement of the employee is powerfully linked to business results, an element essential to the success of the financial goals of the organization, measured by productivity, profitability and customer engagement. Employees that are engaged are involved in the innovation, development, and revenue that their companies aim at.
The “engaged” workers are those that were considered as having an opportunity to do their best on a daily at the workplace and had somebody to encourage and recognize their opinions as workable. These elements foretell the outcomes of the performance of the organization.Gallup further describes the engaged employees as those who participate and are enthusiastic about their work. Thus the research outcomes, according to Gallup, indicate clearly that employee engagement is strongly linked to business results. Lastly, the study concludes that the engaged employees boost the development, innovation, and revenue that their companies aim at.
In general, the cost of the inaction of Business Process Management is huge and leads to a vicious cycle. Right from customer support, loss of staff, inefficiencies, the cost of missed opportunities, reputation damage to loss of profits. All these lead to a general decline of business efficiency, stagnation and may end up in the closure of business.
As you look to optimize your processes, take note of the 5 predictions for BPM in 2017.
Interested in BPM solutions? Look at this evaluation criteria for BPM.
About the Author
The author Katie is the Marketing and Communications Manager at Indellient, a software development and IT professional services firm that helps companies meet and exceed their critical technology and business objectives. Katie writes about the importance of effective business process management and how it is a revenue-driver for organizations today. She also explores topics on competitive advantages, marketing, and more. Connect with her on LinkedIn.