It's one of those problems that business owners often don't recognize as an issue until it's too late: Your company has become inefficient. Running it has become much harder than it needs to be. One way to address this issue is to learn how to reduce complexity in business.
If you feel like your company is always doing things the hard way, consider these cost-efficient operations that can help make things easier.
1. Do a process review to reduce complexity in business.
Shiwali Varshney is the founder and CEO of the Chicago-based Conure Life, a company that produces a line of water enhancers. But before she started her business in the fall of 2017, she was a turnaround consultant and a CFO.
One of the things she's noticed?
“No matter how agile and process improvement-minded you are, the processes evolve [through] patchwork or layers, [and] soon we are doing things that do not help or adding extra steps that are not necessary," Varshney says.
That's why she recommends every business do a process review session every two years.
She speaks from personal experience. One company Varshney worked for had a very complicated and manual process of accounts-receivable collections.
“We got all the people it impacted into a room," she recalls. "With sticky notes, we started mapping the processes from the time of the sale to the collection of invoices and its application in the accounting system. We soon realized that the culprit was the document approval system we were using."
The company didn't have the funds at the time to make an investment into a new, better system. But upon realizing that their system was a problem, they were able to simplify the process nonetheless.
Takeaway: Sometimes, to help reduce complexity in business, you have to take a good look at how you got into the pickle that you're currently in.
2. Develop your own software as a way to reduce complexity in business.
No, it isn't always cheap. But if it solves an expensive problem, you may save enough money that it feels like a cost-efficient approach to simplifying your business.
Kurt Westfield is the CEO of WC Equity Group, a real estate development and investment firm in Tampa, Florida. His company recently created software to manage the company's residential and commercial properties.
Before that, they had worked within fee-based software platforms that are, as he says, “the norm in the industry." They were spending anywhere from $500 to $4,000 a month on software management platforms.
“These recurring fees eat into the bottom line," he says.
Creating their own software has made his business more efficient.
“The portal [we created] allows us to track income, expenses, accounting and so on. It also provides the client with a private login and username that can be logged into from anywhere in the world to view their rental property metrics," Westfield says.
“Additionally," he continues, "we have created data files and the ability to upload and download copies of PDF leases, management agreements [and] contracts, so that the client, and our office, has a cloud-based file retention system to keep up with both client demands and compliance."
Takeaway: In order to help reduce complexity in business, sometimes you need to take matters into your own hands.
3. Automate your way to operational simplicity.
Linda Herron suggests looking at what your business does with paper. Herron is the CEO of SimpliProfit, a Campbell, California-consulting firm that specializes in helping businesses look for ways to improve their accounting, workflow and profits.
“In today's world of automation, you would be surprised at how many businesses have paper forms. For example, employee time sheets, on-boarding clients and many more," Herron says.
She suggests looking at all of the ways your company uses paper, and then finding software programs that can replace them. (TSheets or Zenefits, which tracks employees hours, or using a digital form builder like JotForm or TypeForm.)
It may be confusing at the start, but Herron insists that going paperless can make your business more efficient. Once you're using software to replace what you've been tracking with paper, you can start to save time and office space, and reduce the chances of human error.
Takeaway: When you're looking to reduce complexity in business, it helps to let go of the old ways of doing things and try something new.
4. Upgrade your software to reduce complexity in business.
Software changes all the time, and so does your company's needs. If it's been awhile, upgrading might be a relatively cost-efficient way to make your business more streamlined.
“My advice to businesses is to hire an expert in that software to help them through the review process," Herron says. “The result may be that the staff needs to be trained or a module deployed to help mitigate the pain points or complexities."
Herron worked with a manufacturing company that had an onerous approach to how employees reported their job expenses.
Once a software program was implemented and the staff was trained on it, the company saved a lot of time and stress. And because the program did a better job of managing the numbers coming in, project costs were more accurate and the company made more money, Herron says.
Takeaway: If you're going to reduce complexity in business, you may not have to overhaul everything—just one crucial thing.
5. Implement a budget process.
Not only can having a budget process help save you money, Herron asserts, you may end up discovering things about your operations that you had previously missed.
“The number one benefit I see is that the key leaders obtain a better understanding of their business processes and ultimately want to streamline some of their workflows that don't make sense anymore," Herron says.
“It also helps the business work towards a common goal with accountability," she continues. "And it also starts the conversation on why they do certain tasks that could be eliminated or modified, thus helping improve the overall health of the business along with simplifying processes that don't need to be complicated."
Takeaway: For business owners and executives who want to reduce complexity in business, consider re-examining how much you're spending on your operations. How you won the past may not be how you win the future.
Read more articles on organizational productivity.