Directing IT to boost efficiency

In today's environment, the constraint on resources is requiring managers to do more with the same or fewer resources. Is this possible? Yes it is. Trick is to be more efficient and effective as an organisation.

While there are many ways of efficiency improvement, IT has been one of the major levers. Over the past few decades, organisations have been increasingly investing in IT to ensure significant improvements in efficiency assuming it will translate into reducing resource costs.

Organisational Efficiency Assessment (OEA) can be used as a tool that provides an in-depth analysis of organisational structure, staffing levels, business processes and resulting levels of efficiency and service. An OEA challenges a "that's the way we've always done it" mentality and presumes that even if it's not broken, it could still be a very expensive way to do business.

High impact

In our experience, we have seen high impact of IT on improving organisation efficiency and effectiveness especially in manpower shortage based ME companies. Following key IT initiatives bring significant improvement in efficiency.

Integrate: Business can be significantly benefit by effective integration of business functions through ERP. Ability of ERP's to reduce organisational inefficiency is well known. Integration takes away need to do manual reconciliations and re-punching of business information in different business applications. For example, summer ticket benefits claim process can be well integrated if leave is integrated with expenses. This will allow people to apply for summer leave and tickets reimbursements will be processed due to integration.

Automate: IT applications and infrastructure enables organisation to increase its automation. Classic example can be how email has changed life for all of us. It has made mails responded 24x7 and Blackberry/PDA has further improved TAT on response.

Workflow: Business process automation applications enables organisation to translate its manual workflows into automated system driven ones improving TAT on process, decision, customer services and rationalising manpower required to achieve the work. Classic HR example: Self service leave application moving to reporting officer and approval directly reflecting into month end salary.

Manage documents: A document management system can help organise scan images of documents and integrate them with BPM tool can significantly improve efficiency due to lower document search time, reduce time and money spent in searching and creating lost documents. Staff efficiency gets significantly improvised handling scanned documents for printing, reproduction and storage. Example: Scanned loan application forms based processing has significantly improved efficiency of credit processes.

In addition to efficiency improvements due to IT initiatives, it also helps organisation improve its effectiveness, which significantly reduces risk of wrong decision and allows organisational resources to focus on doing right things. IT helps people become more effective in their decision making process (better MIS) and helps process become more efficient (workflow, automation).

Sanjiv Anand is the Managing Director and Chetan Parekh is a Principal Consultant at Cedar Management Consulting International.