Beware “Efficiency” Myths: Are You Just Shifting The Burden?

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Organisations seem to regularly pursue the panacea of increased efficiency, and this is a regular aim of change initiatives.   There is nothing new about this and it is completely understandable, particularly in industries where competition is rife and where environmental changes are regular.  Pursuit of genuine efficiency, when coupled with an understanding of what the organisation’s customers, staff and other stakeholders value can be extremely beneficial.  Yet sadly it seems that some efficiency drives turn into little more than relentless short-term cost cutting. The focus becomes predominantly internal, and crucial stakeholder voices aren’t heard. Like a motorist who skips two annual services to a company vehicle to “save money”, the middle managers claim success and get promoted.  The new managers that take over then bear the consequences when the inevitable problems emerge.  An un-serviced and un-cared for car will eventually break down, an un-cared for team, process or service will too.

I’ve heard it said that good quality business analysis acts as the “conscience of the organisation”.  I really wish I could remember who said this so I could credit them, as this has always stuck with me as a really important ethical point. A key consideration when undertaking analysis is to understand our stakeholders’ needs and perspectives, and to try to avoid or at least minimise any unintended consequences that emerge as a result of our change.  To do this we need to think wide, think systemically and consider what the future implications of a change might be.

Efficiency from whose perspective?

One way of making things more effective is to move elements of the work to a different stakeholder.  Done well, and with effective engagement this can work well.  Take online banking as an example—if I want to make a payment I can type in the recipients bank details myself. The work of a cashier has “moved” to the customer, with the support of a web based self-service capability.  As a customer I love this, it saves me time and from my perspective, being more efficient and effective.  I do worry about those that cannot use technology,  and hope the banks have found ways of ensuring they aren’t excluded, but on the whole I see online banking as predominantly a win/win (for me at least).  There are benefits for the organisation, and for me as its customer.

This is in contrast to short term “cost cutting” measures that masquerade as efficiency but actually just shift the burden to another stakeholder (often one who is perceived as less powerful). One area where these sorts of initiative seem common is in the interface with suppliers.  Let’s take a theoretical example. Imagine a large corporate organisation that has a long list of suppliers.  Currently supplier invoices come in, which have to be matched up to purchase orders.  Invoices have to be approved, payments made, budgets adjusted and so forth. With different departments needing to regularly procure different types of products and services from a long list of suppliers it must be a real nightmare! 

So, one possible response might be to consider developing a supplier portal. Get the suppliers to upload their invoices in a standard prescribed format, automatically reject any that don’t have a purchase order, and get the suppliers to key the information into a comprehensive form, ensuring that the cost centre, approving managers staff ID, product or service code etc. are all clearly logged.  Since the invoice won’t be processed unless all the information is provided, the suppliers will have an incentive to use it.  Sounds logical, doesn’t it?  Well…. maybe…

Now shift perspective to being a supplier.  You’re a small supplier but have a hundred clients, 80% of whom procure from you occasionally, with 20% being regular purchasers.  Imagine the overhead of having one hundred subtly different invoicing processes and the costs that would incur… plus you need to somehow get this to work with your own accounting processes.

For high value customers who place a lot of orders, this might be no issue whatsoever. The organisation would likely work in partnership and adapt its processes to cater for their needs. Hopefully there would be a two way dialogue. But for the others? It would have to maintain some kind of knowledgebase with instructions on how to use the different portals, and where to find the usernames and passwords.  The problem of “inefficiency” hasn’t been solved, the burden and cost has just shifted. 

Now, of course I’m not saying that there aren’t ways of implementing supplier portals that are win/win, there absolutely are, although finding them can be tricky (and requires supplier representation). However, this is an example where “efficiency” for one party actually created inefficiency for another.  A cost saving for one party increases cost elsewhere in the value chain.   And these costs find a way of working their way back eventually.  Suppliers raise costs, or perhaps just focus their efforts with other customers (which can be an issue if they supply a vital or unique product or service).  

Understanding perspectives, ensuring that marginalised voices are heard and considering longer-term unintended consequences are crucial parts of the BA role.  The conversations aren’t always easy, but they are essential!


Footnote: It would be remiss of me to discuss ‘effectiveness’ without mentioning Checkland’s ‘5Es’ (Efficacy, Efficiency, Effectiveness, Ethicality & Elegance). If you’re not familiar with these, it is well worth taking a look at Checkland’s work or at one of the many papers available on Google Scholar

Also, it’s well worth taking a look at Suzanne & James Robertson’s excellent book ‘Mastering the Requirements Process’, which illustrates how using context diagrams and understanding business events can be beneficial. You’ll find a link to this and other books here.


What are your views? Please add a comment below, and let’s keep the conversation flowing!

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About the author:

Adrian Reed

Adrian Reed is Principal Consultant at Blackmetric Business Solutions, an organisation that offers Business Analysis consulting and training solutions. Adrian is a keen advocate of the analysis profession, and is constantly looking for ways of promoting the value that good analysis can bring.

To find out more about the training and consulting services offered at Blackmetric, please visit www.blackmetric.com

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9 thoughts on “Beware “Efficiency” Myths: Are You Just Shifting The Burden?”

  1. You are right, it is absolutely key to understand the holistic viewpoint for all stakeholders when implementing process change. So often certain users can be overlooked, outright ignored, deemed insignificant, or remain unidentified. It’s such a fundamental step to understand everyone who is involved, and how; although not always easy, or quick to achieve.

    1. Thanks Adrian. Good article and good points about being inclusive. I like being able to do my own bank work but I wonder how much this excludes people without easy access to IT equipment not just those who don’t like using it or are not able to. I was reading the Big Issue who had some staggering facts on how many internet hours were clocked up in public libraries and the closure of libraries having an impact on access. Unintended consquences…..Whilst I imagine big corporates might be more interested in shareholder value rather than marginalised groups or small groups of their affected customers, I do wonder if they need to be nudged to care.

      I’d love to follow Christina. I clicked on her Linked In profile I couldn’t. I’ll see if I can track her down on Twitter instead 🙂

      1. Hi Sharon, thanks for the comment. I absolutely agree — it’s so crucial that we ensure that unheard/marginalised voices are represented too, and this is something that can be tricky to do (but is really important). I love the idea of “nudging”…

        Glad you liked the article 🙂

  2. Adrian, thanks for the book reference. Reading your post reminded me of two “efficiencies” that only serve to disguise the real cost. One is the disappearance of secretaries, those wonderful people who take care of the administrative rubbish allowing the senior technician to get on doing what he/she is employed to do. The other “efficiency” is outsourcing. You probably have the same experiences as I do when you have to deal with an outsourced procurement outfit. It is expensive for you (the supplier) and I have never been able to find a benefit for the outsourcing organisation. It seems they need extra people to monitor what the outsourcer is doing.

    Perhaps business analysts should also be cost accountants.

    James

    1. I absolutely agree, James, whenever outsourcing happens a new “relationship management” and “contract management” layer emerges, so I wonder what the benefit is.

      Interesting idea about BAs being cost accountants. Certainly assembling operational costs for business cases is crucial, so maybe this is an area where BAs should expand too…

  3. I do a lot of work around Lean and one of the signs of a really mature organisation is not only looking at your own processes but the whole Value Chain to the customer. In this way the idea of shifting the inefficiency is clearly nonsensical as it’s still in the same Value Chain.

    1. Thanks Chris, that is a really good point, and of course “value” is defined by the customer — so their perception of a “value chain” can be quite different to an internal process view (e.g. if someone has a bump in their car and is offered a hire car whilst it is repaired, the hire car company might not consider themselves part of an “insurance” value chain. But to the customer, they are *totally* part of that value chain!)

      Thanks again for the comment, very thought provoking 🙂

  4. In my past experience, I see a lot of “If we aren’t changing, we aren’t trying to make money”. Some change is just to make it look like they are doing something, some change goes for the “big numbers”. I sometimes debate with myself, is the TRUE purpose of a business to make money, or to provide a service. So many are quick to say money, and I don’t always agree.

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