Disconnected systems. Myriad applications. Demand for self-service and AI insights. Given all the pressures that businesses face today, it’s challenging for IT to invest in the resources necessary for broader operational initiatives when the day-to-day demands are increasing year over year. And the impact is felt throughout the organization, including lower project completion, compromised security, and poor data insights.
But laggard systems and decreased productivity can only be ignored for so long. IT leaders must leverage data integration and automation to help drive operational efficiency and unlock innovation and new business opportunities.
What is operational efficiency?
In an economic climate that is ripe with uncertainty, it’s critical for IT leaders to take a hard look at their internal IT operations to identify ways to be leaner and more efficient. Doing so can drive greater productivity and lower IT costs by an average of 25%.
Simply put, operational efficiency is an organization’s ability to use its resources effectively to achieve optimal productivity. These resources include everything from IT systems to human resources, time, and equipment.
Keep in mind that operational efficiency is more than just maximizing output. It also means managing risks effectively, training workers on optimized processes, and continuously looking for areas of improvement.
Running your organization on a hodge-podge collection of IT systems and data sources that aren’t optimized for today’s cloud-first IT architectures can make efficiency hard to achieve. That’s why focusing on operational efficiency is an excellent way for IT leaders to reboot and streamline their IT infrastructure to drive a more effective and efficient organization.
Why operational efficiency is important in IT
When it comes to operational efficiency, IT is really the critical path; it’s very difficult to increase operational efficiency without increased IT efficiency and automation.
That’s particularly important because for most organizations, the number of IT projects they need to deliver on continues to rise. According to some estimates, IT departments are seeing about a 40% increase in projects each year since 2021. That often means doing more with the same resources, which can be difficult without additional automation or efficiency.
At the same time, customer expectations are increasing. 88% of customers say that a positive customer service experience makes them more likely to purchase again. So, while operational efficiency is good for reducing costs and potentially increasing profits, it’s also important to remember that high efficiency also means that you’re delivering customer value.
For many organizations, the ability to meet increased customer expectations while also effectively delivering on a significantly increasing project list is one of the key drivers for increased IT efficiency, automation, and investments in AI – all of which impact overall operational efficiency.
How to improve operational efficiency
Improving operational efficiency is a step-by-step process. But putting in the work can deliver wide-ranging implications for the overall business, products and services, and customers. Efficient IT operations can also deliver cost savings as they minimize waste, reduce unnecessary costs, and optimize resources. Most importantly, improving operational efficiency results in increased productivity and higher customer satisfaction.
There are many ways for organizations to drive increased operational efficiency, but let’s take a closer look at three main approaches for increasing operational efficiency.
The estimated number of applications across a typical enterprise has soared by 26% in just two years as organizations strive to meet rising standards for real-time, highly-personalized digital experiences. Yet over the same period, the share of those apps that are integrated has remained flat. Considering that 72% of customer interactions are digital, the experiences customers and employees expect often depend on reconciling, connecting, and harmonizing data from various sources.
To improve operational efficiency through integration, IT organizations should look for ways to streamline processes, consolidate data, improve access to data, simplify reporting, and facilitate communication among departments.
Technology can streamline processes for greater efficiency and even open up new opportunities for innovation. Specifically, automation helps reduce manual tasks and processes, saving time, resources and increasing effectiveness. Increased automation results in reduced human errors, faster execution, cost savings, resource optimization, better security, optimization of resources, increased compliance and security, and more.
For example, digitizing your contact center can create operational efficiency by reducing call volume through customer self-service options, boosting agent productivity, and increasing customer satisfaction. Making better use of resources, whether it’s computer systems, corporate data, or internal talent, is key to driving improved operations. In a contact center example, organizations can improve field service operations by taking advantage of automation, AI, and real-time data to provide more seamless and personalized experiences, leading to reduced resolution times and increased first-call resolutions.
Many of the most successful companies grow through innovation. But it’s hard to innovate when IT systems aren’t efficient. That’s why increasing operational efficiency is key to innovating. Organizations that have efficient, automated processes, integrated systems, and reliable data sources are more likely to encourage and foster innovation than organizations that have disparate IT systems and data sources.
In addition, innovation requires organizations to experiment and try new things, whether that’s processes, products, or services. But in order to do that, organizations need flexible and agile IT systems. IT systems that are scalable and can easily grow to accommodate new demands without performance problems enable organizations to be more agile, consider a wider range of new products and services, and deliver increased customer satisfaction.
By building more intelligent internal or external applications, organizations can not only automate processes but also deliver new products and services to customers that result in increased revenue or customer satisfaction.
Whether a company is integrating, automating, or innovating, it’s important to keep track of metrics and key performance indicators (KPIs) related to operational efficiency to measure the impact of efforts.
Specific ways to measure operational efficiency will vary based on each organization’s structure and needs. Metrics may be either quantitative or qualitative. The best metrics for your situation will depend on your industry, organization, and goals, but common approaches for measuring efficiency include: key performance indicators (KPIs), benchmarking, customer metrics, and operating efficiency ratios. Other metrics for measuring operational efficiency include financial analysis, employee feedback, and supply chain metrics.
How to choose the right solution to improve operational efficiency
While IT leaders must always focus on immediate needs and business issues, operational efficiency considerations offer opportunities to make a larger and more strategic impact on an organization.
A good place for most IT decision-makers to start is by examining both IT and business processes through an operational efficiency lens, focusing on which processes can be improved, automated, or streamlined.
Organizations can also leverage the wide variety of technology solutions available that can jumpstart efficiency improvements. For example, Salesforce cloud solutions such as Sales Cloud, Service Cloud, Marketing Cloud, Commerce Cloud, and Community Cloud enable organizations to streamline related processes, automate repetitive tasks, and provide valuable insights. Analytics solutions such as Einstein Analytics and Tableau CRM improve operational efficiency by enabling organizations to make data-driven decisions and use data to identify trends and optimize operations.
IT leaders who want to lead, not just in IT but in the business, can step forward with operational efficiency to deliver strategic benefits to the overall business.