Efficiency Audit

Custom Excel Worksheet Protection
When the famous bank robber Willie Sutton was asked why he robbed banks? his classic response was “because that’s where the money is (1)The quote evolved into Sutton’s law which is often invoked to medical students as a metaphor for emphasizing the most likely diagnosis, rather than wasting time and money investigating every conceivable possibility. When you conduct an Efficiency Audit of your business, your thinking needs to be much the same;Where is the bulk of my money going?  
For most companies, the answer will be staffing. Pay an employee $15 per hour and add in the cost of Taxes, insurance and benefits swell the total hourly cost to $25.  Think of that $25 dollars as an annuity.  Save one hour each week a year and that equals $1,300 each year for each hour saved ($25 for 52 weeks).  Time truly is money. For most companies, the answer will be staffing. Pay an employee $15 per hour and add in the cost of Taxes, insurance and benefits swell the total hourly cost to $25.  Think of that $25 dollars as an annuity.  Save one hour each week a year and that equals $1,300 each year for each hour saved ($25 for 52 weeks).  Time truly is money.
So exactly what is an efficiency audit?

Operational-Efficiency-Audit

Improving the efficiency of your operational activities means making things better, not just fighting fires or managing crises. It allows you to look at how you perform work and focus on eliminating waste – of money, people, materials, time and opportunities. The ideal outcome is that jobs can be done cheaper, quicker, easier, and safer (2).

 

In a large firm an Operational efficiency audit involves flow charting the major processes and examining them for areas of potential process improvement. The consultant or auditor has an advantage over the employees as he is an outsider and not corrupted by: “That is the way we always did it.” You can conduct your own efficiency Audit by forcing yourself to look past your bias of ‘that’s the way I set it up”  objectively looking at your business process by process, (focus on the largest processes first) ask yourself are there tasks that you suspect could be improved by automation. Telltale signs of inefficiency or candidates for improvement could be:
Automation Target Checklist
  1. Large tasks that are expensive because of the number of manhours they consume.  Think of these as your “A” items- if there are big, single item savings and or quality improvements to be made they will be here.
  2. Highly repetitive in nature with lots of keystrokes that are prone to errors.  Errors take time to resolve, impact goodwill and waste money.
  3. Critical processes that are expensive if done incorrectly.
  4. Mature processes where an investment in automation is likely to yield results for some time.
  5. Error prone processes – automation can help get it right the first time.
  6. Processes that require lookups in systems that are not integrated. 
Automation does not have to be expensive or of large scale to be effective.  Think of any input form your business uses? Is it intelligent? That is, does the form help the preparer get it correct. Does it reject or highlight entries that exceed expected parameters? For example: It was one of my first jobs at a small firm, and I sat near the person in charge of purchasing office supplies. One day a delivery guy wheeled in three boxes of 10,000 paper clips each.  I snooped around and saw that the order was for 90,000 clips in total, the office supply company shipped the 30,000 they had on hand and back ordered 60,000 more clips.  The purchasing person was shocked as her intention was to order 90 boxes of 100 clips.  
Efficiency Audits
Errors like this waste time and money and are easily avoided using simple, inexpensive, intelligent screen level error avoidance.  As yourself, are snafus like this the norm at your firm? So, what specific processes might we automate? Here are some starter ideas but remember there almost no limits to automation.
  • Report Generation and Distribution
  • Email Automation
  • Spreadsheet Automation 
  • Customer Service/ Sales Scription and Order Entry 
  • Browser Automation (including data retrieval)
  • MS Office Automation and Customization 

As a Freelance MS Office Developer, I do not charge for consulting discussions about the feasibility of an improvement project.  Those “is it possible discussions” or “what would it cost to?” Are part of my cost of doing business.  If I am to help people with automation, the what I can or ca not do needs to happen without the meter running.  So, if you have processes that you think could be improved please call me and allow me to use my 20 years of Automation, Business Experience and Finance to improve your Business processes.  You can contact me Here.
Citations
1)https://en.wikipedia.org/wiki/Willie_Sutton
2)http://www.failteireland.ie/FailteIreland/media/WebsiteStructure/Documents/2_Develop_Your_Business/1_StartGrow_Your_Business/Operational-Efficiency-Audit.pdf

 

If you enjoyed my blog post and would like to comment or share a similar experience please send your comments  Here.
If you would like to say hello and Buy me a cup of coffee please follow the link.

Raymond Mills MBA, MS
Raymond Mills, M.B.A., M.S.  has spent over 20 years of his career as Accountant, Investment Bank and Credit Card Technical Auditor/ Data Analyst.  His specialty was using Excel to get Big Databases including Teradata, Oracle,  Squel Server and Sybase to give up their secrets. Ray has said “I love nothing better than using VBA to unleash the power of Microsoft Office.” You can contact Ray @ 484 574-3190 or by emailing him Here

If you have a challenge with Excel, Access or Word and would like to speak with Ray,   You can get his contact details by clicking here: Contact Me
Tagged , , . Bookmark the permalink.

Comments are closed.