THE BIG BUSINESS
With pre-Covid-19 levels of demand not expected to return for some time in many sectors, businesses are accelerating transformation plans to create more efficient organisations. And while cost reduction is an underlying driver of this trend, it is not the primary motivation.
Greater efficiency can help firms optimise operations and build better, more productive, scalable and resilient businesses that are fit for the future. In order to understand the strategies being formulated in boardrooms across the country, we surveyed 250 C-suite decision makers at some of the UK’s biggest businesses.
Tellingly, every one of them said they have been focusing on making their business more efficient since coronavirus struck. That’s a really promising indicator for UK plc, because efficient businesses are better positioned to invest in sustainable growth.
We hope you find the report informative and inspiring which you can download in full below.
The new efficiency agenda
Since the pandemic, roughly equal numbers of firms told us they had increased their focus on creating efficiencies in their back office (46%), front office (49%) and production (50%).
However, twice as many have prioritised front office services (57%) than back office services (26%). That focus on customer-facing services is understandable given current conditions.
But it represents a missed opportunity, because back office efficiencies unlock capital to drive front office efficiencies and wider organisational transformation.
Businesses with a focus on efficiency are finding their strategies are paying dividends. They have used the capital unlocked by their efficiency to invest in new technology (41%), improve the customer experience (40%), expand into new markets (34%), compensate for falling revenues (27%) and to fund their Covid-19 contingency measures (26%)
“…businesses are using the disruption caused by Covid-19 to build better, more resilient businesses by reinvesting efficiency savings to weather the current crisis and grow.”
The year ahead:
Efficiency in a post pandemic world
Improving a firm’s financial position cannot only be a cost-cutting exercise; redundancies, asset disposals and business divestment are not long-term fixes. Rather, in a competitive climate, when consumer and business confidence is low, investment in proposition and customer experience must stay on the agenda.
So, it’s encouraging to see that all but one of the firms we surveyed is planning to make their business more efficient in the next year.
Firms aren’t only planning evolutionary changes to their systems and processes – 82% of UK executives are also readying transformational projects that will fundamentally change the way they operate.
They plan to use the capital unlocked by future back office efficiency gains to invest in new technology (42%) and improve their customer experience (42%), demonstrating how changes in one aspect of a business can unlock further transformation.
“The current crisis appears to be acting as a catalyst for businesses to rethink and replace inefficient processes, such as manual payment processing.”
The business efficiency opportunity
Firms ranked the steps that they believe would be most effective at making their business more efficient as investing in people and skills (59%), investing in new technology (56%) and improved governance (44%). A third (33%) identified outsourcing as the most effective route to greater efficiency.
But businesses do see barriers to making their operations more efficient, chiefly around cost (35%), complexity (34%), lack of time (29%) and lack of knowledge (29%).
A good outsourcing partner can help overcome all these perceived barriers. Any outsourcing programme is designed with specific measurable qualitative and / or quantitative objectives, which can include cost to serve, customer satisfaction, accuracy and more.
It means return on investment can be calculated before a contract is signed and the outsourcing provider held to account, helping remove the uncertainty and anxiety over handing elements of your operation to a third party and a smooth transition.
“…boardrooms clearly have efficiency on the agenda – four in five (80%) say they have already identified the function in their business that has the biggest opportunity for efficiency gains.”
Craig Naylor-Smith, Managing Director, Parseq
The research in this report makes it clear that firms making efficiency gains are achieving material benefits.
Unlocked capital is being invested in new technology, better customer experiences, entering new markets, innovating new products and more.
The full impact of Covid-19 is yet to be felt. But, in my mind, the findings of our research underline the determination of UK plc to adapt and thrive by taking advantage of the opportunity greater business efficiency offers.
To download the full Big Business Efficiency Report, please enter your details below.