Is efficiency the business buzzword of 2008?

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With the global economic outlook less than rosy and most organisations bracing themselves for a period of tougher trading conditions, business efficiency is set to be the top business buzzword of 2008.

For business leaders, that will involve identifying areas of the business where cost savings might comfortably be made or where overly complex or costly processes might be streamlined. But such decisions will need to be made against a backdrop of competing internal interests and a rush by managers to protect their own individual fiefdoms, according to Chris Gough, a Microsoft specialist at Logicalis.

"For every business process, representatives from multiple areas of the business will need to be involved - not just the department chiefly responsible for overseeing process, but also compliance, auditing and other internal business functions. Satisfying the requirements of all concerned is no easy task," he warns.

And even in the most efficiency-conscious organisations, directors may find that multiple projects are already underway in individual departments, aimed at ironing out procedural inefficiencies and often requiring a hefty dose of technology to bring them to fruition.

The danger with this approach, says Gough, is that the bigger picture gets overlooked. "The finance department, for example, might achieve great gains in business efficiency by establishing a portal that gives users a single point of access to all kinds of useful business information and data - but if that project is driven by, and confined to, the finance department, then other areas of the business simply won't benefit," he says.

A better approach involves aligning the entire organisation, its processes and its culture within a single, company-wide ‘Efficiency Framework', says Gough - and, since the drive for increased efficiency so often involves technology projects, the CIO will be a key figure in helping the business make the best decisions about what changes it needs to make and which projects should take priority.

"What's needed is someone who's focused on business efficiency right across the organisation and who has the knowledge of technology to see which IT investments might deliver the most widespread gains," he says.

The ‘green agenda' will play a big part in many of these decisions, since environmental projects are becoming increasingly important in reducing unnecessary overheads, adds Gough - and that thinking is echoed elsewhere.

By 2009, more than one third of IT organisations will have one or more environmental criteria in their top six buying criteria for IT related goods, according to recent figures released by analysts at IT market research company Gartner. Behind that trend, they add, is the wish to contain costs and to tackle the challenges of 2008 as a leaner, fitter business.

Your Comments and Questions

chris gabriel, 6 months ago

Jon, I wish I had a good cogent argument to respond with. But unfortunately I do not. We must keep fighting the good fight though.

Jon Wright, 6 months ago

Thanks for your response, Chris. Call me a cynic, but I'm still yet to be convinced that many IT vendors have taken on board the need to offer flexible IT systems that meet a business need, instead preferring to tailor processes to the way their system works... but that might be a subject for another blog entry!

Chris Gabriel, 6 months ago

Jon,I agree, IT must be seen as a business innovator, not just a way of driving our business cost. However, in my opinion, IT must be able to do both. Taking a massive amount of fat out of a business process might be dull old IT at work again, but, it could be a massive business advantage. Fixing the flabby business processes that we all know exist may reduce cost, but more likely will improve customer service, improve employee satisfaction, change the businesses ability to expand or contract as markets change. IT has played a major role in making processes fixed and inflexible over the last 10 years because we have built IT systems to an exact business process, and when the process changed IT could not. So, I think the debate now is can IT help businesses be more efficient by making them more agile, Can IT help businesses be more efficient by making them less clunky and less rigid and more able to change. Finally, can IT do all of this and be more efficient themselves in what they do. If they can do all of this then one big thing changes, IT can do more of the sexy stuff (innovation) because they will spend less of their time managing the existing complexity of business change.

Jon Wright, 6 months ago

I would perhaps argue that this view is based on the rather old-fashioned belief that IT is primarily an efficiency tool. Yet when used to help grow the business – and dare, one say it, in these financially worrying times – to take a risk, IT can really help businesses grow fast. I would like to see more examples of IT being used as a business accelerator, as its role as a driver of efficiencies is already recognised.