Old MacDonald nearly had it right
E-I, E-I-O! goes the familiar refrain from the nursery rhyme. It’s very close to the mantra we use for process improvement….
EIAO: Eliminate, Improve, Automate, Outsource
Delivering Efficiency and Effectiveness gains in a business process generally uses one of these approaches
Critically look at a process (and then each process step) to see what value it is creating. Ask what would happen if you eliminated that process or step. If there was no real reason to do it and you eliminated it, you’d save 100% of the time, cost, effort and errors associated with the process/step!
This is a big topic, but the basic approach is to think about how you could do things differently – can you achieve the same output/outcome by a totally different method? If not, perhaps there are some shortcuts or faster ways of working to get big improvements in the overall process.
Investigate whether there are opportunities for your manual processes to be automated (normally through technology). There are technology and vendors for pretty much every business process. Also ask: “Can our customers help make things faster?” – an increasing number of customers will prefer to use electronic means to communicate with you; can you use this electronic data to feed directly into your systems without a staff member having to re-key it?
Using an external organisation to perform your business processes on your behalf can create large improvements in both cost and speed of delivery, normally due to the efficiencies of scale that most outsourcing organisations can create (because they’re doing the same or similar things for lots of organisations).
But here’s the trick: to maximise your ROI you need to do these in order
- Why would you spend time and money improving something if you can eliminate it? Eliminate first!
- Why would you automate a manual process that you haven’t improved (or eliminated)? In such cases, you’re just automating a rubbish process. Cheaper and faster rubbish is still rubbish. Please improve your processes as much as possible BEFORE automating. It’s always much harder (and more expensive) to improve a process once it is automated.
- Why would you outsource something that can be automated? Outsourcing is a very valid improvement approach, as long as it’s done correctly. Outsourcing has many hidden costs that the outsourcing companies won’t tell you about (think about management of the supplier, lack of responsiveness, locked-in price increases, to name a few). Outsourcing, while valid, should be seen as a last resort to improving your business results.
So, Old MacDonald nearly had it right – in fact, repeating Eliminate and Improve at the start is a great idea!
Posted by Ben Haigh on 10 November 2016