Operations Council recently held a panel discussion titled, Why COOs Should Prioritize Operational Efficiency Over Growth, sponsored by Workiro.

Our subject matter experts were Chris Muir, VP at Workiro and author of The Winning Strategy, and Andy Zinkle, Director ERP Solutions at GoVirtual Office.

Following are key takeaways to this discussion. If you are interested in learning more, view the full webinar archive video here.

The common myth: growth = success

Chris: To start off with and one of the key data points that we wanted to highlight, we conducted a survey with an organization called YouGov with looking, talking to business leaders across a number of sectors and asked them where their businesses were focusing and 65% of those businesses that responded said they were prioritizing operational efficiency over growth, which really again emphasizes the point that we have here. But it really is a myth or a common myth that growth equals success. In your dealings with the clients that you’ve dealt with over 20 years that you’ve been working in this field. Do you see a typical focus on growth and if so, what challenges does that introduce?

Andy: Many of our clients come to us because they’re growing right or they’re part of that growth, they’ve identified that they either need help with their NetSuite account or maybe they’ve realized they’ve outgrown something like QuickBooks or a legacy ERP. Whatever they’re using to try and manage all of their growth is done in disparate systems and they can’t effectively communicate well with the company about how things are going, what needs to be done or when. In the end, service to their customers many times are suffering. And so, the challenge that introduces is that they have conflicting priorities.

Chris: What dangers have you seen in scaling operations too quickly without the proper foundations in place?

Andy: At GoVirtual Office, we deal mostly with ERPs and typically ERPs have two primary benefits. First, systems can provide data for informed decision making and second, it can create operational efficiencies. So, without proper systems in place, companies will not have accurate and timely information to make quality decisions.

For example, you may want to see what product is performing the best or what items are selling the fastest so you can properly order more inventory or properly schedule production to stay ahead of demand.

On the operational side, growth without preparation can lead to bottlenecks. Manual systems and personnel in place for smaller businesses may not scale and allow for growth. So, you could see a ton of sales coming in but not be able to fulfill the obligations. And that can create a lack of client satisfaction or even just confidence in your company to perform effectively. If there’s a certain activity that one person or one group of people always do, they’ll quickly reach capacity. And that can limit the volume of what activities can be conducted. I would say a hidden danger is that can hamper the growth of a company. Systems and procedures in place can provide information and complete operational activities without the bottleneck that that comes with tribal knowledge holding, you know, with one person or with one group of people.

Chris: I think we’ve talked at a high level of the dangers that can come from being too focused on growth, but what are your thoughts on how this can impact the company’s operations, the employees that are working there and the systems and processes that they use?

Andy: The one that stands out to me is operational friction. It can actually be a surprisingly big issue depending on the company’s dynamics and culture. If employees are finding it increasingly difficult to do their job as a company grows, they may begin to resent the growth and could serve as an anchor for that growth. If systems and processes are streamlined before growth, growth can happen without anyone being negatively impacted by it, it’ll all just kind of feel natural. And I would add that proper foundations in place can allow for company growth without the need to add people. One of the biggest things that we run across as we do implementations of NetSuite is the change management aspect of it.

Chris: What do you think are the key considerations for businesses to make sure their tech stack supports improving operational efficiency?

Andy: I would say anticipate bottlenecks. Look at your business processes and look to streamline or automate those processes that keep the business running the most smoothly. Keep in mind the 80-20 rule. You want to optimize things that are most important. You don’t have to automate everything. Just focus on automating those things that are the most critical and the most likely to impact your operations. You don’t have to get bogged down with every single use case. A lot of times we have clients come to us and we go through a requirement gathering and they give us a whole list of every single scenario that they need to account for. You don’t have to account for everything in the automation. You have to account for it in your processes and procedures, but not necessarily in the automation. that 20%, a lot of that can be managed through some kind of exceptions, whether it’s some kind of exception report or a small manual process or whatever the case may be. But you don’t have to automate everything.

Chris: How do you see integrated systems playing a role in operational efficiency?

Andy: NetSuite is an ERP would serve as kind of that centralized hub. And so you’ve got information flowing in from several different systems. It might be an e-commerce site. It might be a CRM platform. It might be having document management directly attached. Everything integrated. So regardless of which system is the entry point, everybody’s looking at the same information and can access it and interpret it the same way. I would say to the idea of operational efficiency, it’s a thing. A lot of our clients we work with, come into an ERP implementation and think, we just got to implement it. And then it’s done – foundation is in place, but it’s beyond that. It’s not just a big one-time event occurs. Businesses are going to evolve. Processes are going to need to be tweaked and adjusted, and everything needs to align with any changes that are happening within the company.

Chris: What advice would you give around getting access to real-time data?

Andy: I would say seek to streamline your communication and information accessibility. One of the main benefits of an ERP system in particular is information is there that can allow for processes to flow smoothly, at really levels of the organization to make informed decisions to move the company forward, that day-to-day operations or at a more, know, sea level strategy. So, you the data can help make sure that the companies are growing in the right areas. But you need to make sure that they’re available and everybody can get to the information that they need. Set information through a dashboard, the things that people need to do to keep the business moving smoothly and do their jobs efficiently, have that information readily available. If it’s documents they need to reference, make sure that it’s able to go wherever they’re at. If it’s something related to a customer, make sure that if they’re looking at a customer in their ERP, they can get to the document that’s related to that customer from that customer record.

To learn more about document management and view a live demo, watch the full webinar here.

ABOUT THE SPONSOR:

Workiro is an award-winning, intelligent document management system that combines email capture, e-signatures, seamless collaboration, and one intuitive platform designed for businesses that work closely with customers and third parties. Workiro ensures that all interactions, approvals, and documents are automatically saved and classified, eliminating manual effort and reducing risk. GVO is a 20-year solution provider for NetSuite, providing support for companies looking to enhance and optimize their NetSuite environment and helping companies select and implement a new ERP to meet their business needs. Learn more here: https://www.workiro.com/workiro-home