Fix first, automate later: The smart path to cost optimisation
Gary Thompson, Transformation Consultant and member of the Definia Associate Community, shares insights on how improving processes is the first and most important step in cost optimisation.
For advice on getting started with cost optimisation, don’t miss the first instalment of this series.
What is process optimisation — and how can it help optimise costs?
All companies use processes to guide what they do, whether it’s making products, billing customers, hiring new staff, or simply greeting someone at reception. However, as the world evolves, processes need to adjust so they can run more efficiently and effectively.
Process optimisation is the act of:
- Identifying business processes and analysing how you do them.
- Identifying inefficiencies.
- Implementing changes through process reengineering to improve performance.
The benefits of process optimisation include:
- Helping to cut costs and boost earnings.
- Making businesses more flexible.
- Enhancing quality control to minimise errors.
- Optimising resources to maximise productivity.
- Identifying repetitive tasks that could be automated to improve efficiency.
Fix first, then automate
There’s an old saying: “If it ain’t broke, don’t fix it.” But it probably is!
Broken and fragmented processes, spreadsheets and workarounds are used daily as a means of avoiding a bigger problem — not to mention the negative impact of siloed working. Processes are central to how all organisations work, so process improvement should be the first phase of any process optimisation exercise.
All too often I hear clients say, “Let’s fix what we do with new technology”; but this approach can lead to disaster.
Automating a broken process is like paving over potholes; you might make the road smoother temporarily, but the structural flaws remain.
In fact, automation can amplify those flaws. Automating complex and non-standardised processes, before fully understanding them, can lead to higher operating costs, lost productivity and customer dissatisfaction. Automation should not just be viewed as a cost-saving tool — it’s a strategic lever for enterprise transformation.
Before deploying automation, ensure the underlying process is optimised and aligned with broader business objectives. This disciplined approach protects investment, accelerates impact and ensures automation drives measurable value across the organisation.
Fixing processes first can provide substantial, rapid returns, which can help fund automation. It also provides the opportunity to re-design a process in the context of wider business objectives.
So, before automating your processes, take a step back and assess whether current processes are efficient and scalable, adopting a ‘fix first, then automate’ approach.
Four steps to better processes
STEP ONE: Identify your goals — why are you looking to improve a process?
There are many reasons to improve a process, such as poor performance, low staff morale or a dreadful customer journey. This exercise will help determine the best way to optimise any given process.
STEP TWO: Analyse current process and identify potential areas of improvement.
Ask yourself these questions to determine if a process is delivering what it should:
- What is the real purpose of this process?
- Is it delivering the right outcomes and aligned with broader business objectives?
- What would it look like if we designed it from scratch? Can it be simplified, streamlined, or reimagined?
Then you can start looking at how it can be improved.
STEP THREE: Begin to optimise processes based on your goals and specific objectives.
Always look at process improvement with a view to automate in future. Test processes to identify any issues or areas that need to be improved further.
Consider the following:
- Company culture: Look at the skills and behaviours of the teams.
- Structure: Look at the way teams are structured, organisationally and physically. For example, relocating a team closer to the process they support can speed up decision-making and reduce handoffs.
- Voice of the customer: Are customer needs being met, in terms of their experience and journey? This is the time to make process more customer centric.
STEP FOUR: Implement the optimised process across your organisation, monitoring to ensure the revised process maintains the desired results.
This is not a one-off evaluation exercise. Ideally, you should undertake continuous analysis, continually refining core processes to achieve incremental improvements.
Choose your approach
There are many proven methodologies for process improvement. Here are some of the most effective:
Methodologies that work:
- Lean thinking | Focuses on eliminating non-value-adding activities to deliver more value to customers.
- Six Sigma | A data-driven approach that reduces defects and variations in outputs.
- Kaizen | Continuous improvement through small, incremental changes that build cumulative performance gains.
Techniques to try:
- Process mapping | Visually documents a process from start to finish to identify improvement areas.
- Process mining | Analyses processes integrated with enterprise systems, such as your ERP platform.
- Root-cause analysis | Identifies the underlying causes of challenges and pain points.
- Value stream mapping | Creates a visual map of current workflow to design a more efficient future state.
- Workflow analysis | Inspects and improves how work moves through a process end-to-end. Put simply, if a process is what you need to do, a workflow is how you are going to do it.
Choose the methods that suit your company best, and don’t be afraid to combine strategic approaches.
The bottom line
Process improvement drives efficiency and effectiveness by asking “How can we do this faster, smarter, cheaper or get better outcomes?”
It aligns what you do with your strategic goals and, crucially, must come before automation — because automating a flawed process can have disastrous consequences. Finally, it’s a lever in boosting your bottom line and drastically cutting operating expenses.
How Definia can help
Your business faces unprecedented challenges, but within every challenge lies opportunity. If your organisation is ready to unlock cost savings through strategic process optimisation, get in touch with us today.
