The Key to Becoming a Leaner and More Profitable Company

11/14/2016 09:22 am ET Updated Dec 06, 2017

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By Russell Kommer

Companies all over the world are constantly striving to become more strategic -- or at least they should be. The reality is that many of these companies have already been presented with strategic alternatives that break new ground, but never fully embraced them. They're either too complicated to understand or it just costs more than what they're willing to pay. In cases like these, business owners end up working with what they have. And it works -- until it doesn't. Here's what you need to do to help your company become leaner and more profitable.

Analyze Existing Processes

By becoming leaner, companies not only reduce operational costs but also become more scalable and well positioned to take on more business. It involves a thorough analysis of all business processes, from selling and marketing, to costs of goods sold and expenses. Each of these processes generates huge amounts of data, and the act of storing this data is a process.

As the executive director of a software development company based in New York, I have gained over 10 years of experience overseeing the development of solutions that have made companies leaner and saved them tens and even hundreds of thousands of dollars. We do this using a three-step strategy:

  • Discover: First, we identify the barriers that hinder internal processes. In most cases, the current software isn't always completely adherent to a specific workflow. This causes people to invent inefficient workarounds. My company evaluated our current processes to look for redundancies and dependencies at every step: We dug deep into our internal course of actions to identify a precise cost-effective solution that best fit our needs. For us, this led to alternative custom software. We have found that for most businesses, a change in software is the way to save the most money with the lowest amount of investment.

  • Strategize:  After completing the discovery step, we considered which processes were actually driving our business. Was it the sales or customer service department? Was it the inventory levels or accounting department? Track and analyze key performance indicators that have the potential to increase revenue. We used statistical analysis and time management software to provide estimations about which process was going to be the most effective. We also planned out solutions, and noted what tools were required to achieve them. Even with software, this is an intricate and methodical process that takes a considerable amount of time, as there is no one solution for every company.

  • Implement: Once we composed a custom Excel spreadsheet, we simply implemented it into our existing system. Don't be afraid to use the "help" function in any type of system if you don't know where to start.
  • When you have over 100 employees trying to learn a new software system, no matter how simple it is, someone is guaranteed to have problems adjusting. That's why it's best to train all of your employees on the new processes beforehand. The most effective training practices involve careful explanation. Appoint a subject matter expert within your organization. Your employees will also better follow the transition with the help of recorded webinars that go through applicable examples step by step.

    When Do You Need to Automate Tasks? 

    If you find that your company is spending a great deal of time executing a repetitive task on the computer, you might want to consider automating it.

    By discovering what the problem is, strategizing a plan to solve the problem and successfully implementing it, our company has been able to take on more clients. Because our workflow is scalable, we're able to execute tasks in half the time it would normally take and we are earning more money for our company. Keep an open mind, plan your changes and commit to your plans. It's a grueling process for some companies, but the benefits at the end far outweigh the struggle. If you think you might be in a similar position, consider how these two questions impact the bottom line:

  • In order for accounting to process payroll, bill customers, and pay vendor invoices, are three individual employees required for data entry relating to those respective processes?

  • How would this change with a different data flow?
  • What you already have may be working well for you right now, but may not be scalable as you grow. I've worked with Fortune 100 companies, small businesses, and growing enterprises somewhere in between. Time and time again, I see the same trends happening with all of them: Improving automation and efficiency in the right areas will make your business leaner and can ultimately increase your profitability.

    Russell Kommer is the founder of SharePoint Programmer, expert in Microsoft SharePoint & Office365 development for businesses of all sizes.