The business productivity is the ability of an organization to use its resources to produce goods or services profitable, as desired by customers. It refers to how well a company converts input inputs, such as labor, materials, machines, and capital, into goods and services, or into production.
It is productivity that measures the performance of an organization, and can also be used by companies to evaluate their progress. Today, it is no longer limited to measuring input-output ratios; increasing productivity means working smarter.
Opportunities to improve efficiency can be sought almost anywhere in the business. The technological advances , customer expectations, and especially globalization have increased the need for greater business productivity.
Entrepreneurs must now compete with companies located in countries like China or India, where labor costs are a fraction of what they are in other countries. The productivity of the personnel depends on their skills, the quality of the machines available and effective management.
How can it be improved?
Productivity can be improved through training, investment in equipment, and better staff management. Training and investment cost money in the short term, but can increase productivity in the long term.
Simple changes to operational processes often increase productivity, but the greatest benefits are realized through the adoption of new technologies, which may require capital expenditures on new equipment, computers, or software .
Although from an individual perspective, employees can do their job well and with high levels of productivity, from an organizational perspective their productivity can be zero or negative if they are engaged in redundant or value-destroying activities.
In most business models, a company's success is measured by how efficiently its resources are used to produce goods, the price at which it can sell its products, and the number of products it can sell.
Types
Collaboration
Collaboration is important to any business. Applications like G-Suite or Microsoft Teams offer collaboration platforms where employees can execute different types of work.
With these tools you can access relevant data in one place. For example, in Google Drive you can save all the data and give access to those who want to access it.
Employees working remotely can very easily collaborate and share documents, avoiding unnecessary meetings and saving a lot of time.
Flexibility
By introducing technology into the workplace, employee flexibility is at an all-time high, allowing them to work from anywhere, being able to access important information.
Employees can save a lot of time by working at home, because these days it takes hours to get to the office because of the existing traffic.
The company saves money by not needing to spend more on heavy workstations. Through mobile phones, there is frequent contact between team members, even from miles apart.
Business analysis
There are many advanced business analysis and reporting tools on the market that help you gain a deep understanding of business performance and market trends.
If a company wants to stay ahead of the market and accept the many changes, business analysis plays a vital role in increasing the revenue of the company. They are the most important documents to increase productivity.
Customer Support
Business productivity can be increased by linking Customer Relationship Management (CRM) systems with employee devices.
By giving employees access to customer data, time spent searching for data will be reduced. This will increase customer satisfaction, because you won't have to wait long hours to solve your problem.
When customer data is easily accessible to employees, this increases business productivity. With so many technologies available, customer service and support can be provided at any time.
Marketing
Everything has been digitized and Internet marketing has been growing. There are various internet marketing strategies such as developing a website to promote the products, search engine advertising, social media marketing , etc.
Email marketing is a powerful method of reaching a large group to advertise the business.
Factors that positively influence business productivity
Use technology
Web-based technologies can dramatically improve business productivity. There are management tools such as spreadsheets, ready-to-use software or custom-developed applications.
Electronic purchasing can be used to obtain materials. It allows to obtain more competitive prices, since it is no longer limited to local suppliers; the cost of the transaction is reduced with less paperwork.
Inventory control systems can help reduce inventory levels, improve profitability, and speed response time to customers.
Online ordering systems integrate inventory information with the organization's purchasing, accounting, and e-business systems .
Review existing processes
The processes should be viewed from the point of view of a potential investor. You have to take into account the general objective and vision of the business, making sure that the processes meet those objectives and add value.
It is advisable to draw an accurate map of each process in your information flow; This way, you can better understand the links between the different elements of production, and you will be better equipped to identify and eliminate unproductiveness in your company.
Implement continuous improvement plan
- Assess competition and best practices in the industry. Do not copy the plans of other companies, but develop what works for the company.
- Get outside help to assess the strengths and weaknesses of the business. This provides an objective point of view from which productivity can be improved by redesigning processes.
- Assign specific teams to specific processes. Put in place a formal suggestion system for employees.
- Seek innovative achievements. Small improvements can turn into big increases in productivity.
Outsourcing
Outsourcing is a cost-effective way to focus your efforts on what you do best as a business.
Whether you choose to outsource logistics, accounting, payroll, public relations, or IT, it's vital to first understand what drives costs and profits in your business.
Strategic Alliances
A successful alliance allows the company to grow without expanding its size or incurring higher costs. For example, production processes could be improved by increasing economies of scale and expanding the distribution market.
It could also help the business negotiate better supply deals, share costs, and take advantage of expensive technology.
Factors that negatively influence business productivity
Meetings
Meetings should be the means for a group of people to generate solutions. If information needs to be disseminated to a large group of people, email is a much more efficient method.
To prevent meetings from affecting business productivity, only include the people who need to be there, have an agenda in advance, and keep everything as short as possible.
Overly strict hours
Telecommunications and cloud technology make it possible for employees to work and collaborate over long distances, so is it really necessary to require workers to be at their desk from 9am to 5pm?
If employees are not trusted, even if they are confined to their desks, a productive work day is not guaranteed. Workers must be given the autonomy to work when and where it is best for them.
Too much stress
The costs of downtime and lost work days as a result of overly stressful work environments are very high. Stress levels in the office should be a big concern.
There are countless factors that cause stress in the office - from workplace temperature to hostile coworkers.
Stressors change from person to person. However, if you create a way to pay attention to stressful situations, you will be able to work to resolve them.
Very little recognition
When exceptional performance is not recognized, employees may decide that no extra effort is worth it.
While monetary bonuses are always welcome, something as simple as a lunch, a written note, or even just saying “good job” can go a long way in incentivizing employees to perform at their best.
Lack of trust
When employees feel like an integral part of the company, they become more interested in its success. However, few things separate employees from the company more than a lack of confidence.
If the transparency of the business is limited, it is manifested to the employees that they are not part of the team. Similarly, tackling problems by treating workers like spoiled children only shows how little is expected of them.
Banning personal phone calls or closely monitoring internet use may seem like ways to improve productivity, but the resentment employees will feel over these restrictions will mean less commitment.
Importance for quality
Productivity increases the overall efficiency of an organization. By increasing efficiency, the company's production capacity is used at the optimum level.
Resources are used efficiently to obtain the best possible results. The more products that are made, the lower the overhead costs and the higher the profits.
Successful companies are those that prioritize productivity, rather than just seeking income and profit.
Companies that do not pay attention to productivity pay a huge price in terms of reduced production and high cost of production, resulting in fewer sales and lower profits.
The level of business productivity can be considered a measure of success or failure for any business.
Competitive prices
Improving production reduces the cost per unit of the product, producing lower prices with better quality. Likewise, it optimizes the competitiveness of the company in the market.
With competitive prices, the company is in a better position to attract more customers and make more sales.
Increased earnings
Increased production by efficiently using the organization's resources leads to lower cost production. This results in higher sales and profits.
If an organization's profits increase, investor confidence increases. Likewise, it increases the value of the company's shares and its reputation.
The company can share with its employees a part of its profits, as a result of better production. This raises the motivation of employees for the satisfaction of a job well done and for receiving part of the profits.
Discover strengths and weaknesses
It allows a company to discover its strengths and weaknesses. Also easily identify the threats and opportunities that prevail in the market as a result of competition and changes in the business environment.
A company can increase its business productivity by making appropriate changes to its business policies and processes, in order to improve weak areas and capitalize on strengths.
Similarly, strategies can be formulated to turn threats into opportunities; This generates greater profitability and stability.
Real case example of productivity improvement
When an organization is responsible for tracking the money and property of approximately 70 million people, you can be sure that customer service will be one of your most pressing concerns.
Such is the case with Wells Fargo, one of the "Big Four" banks in the United States. Wells Fargo realized that many of their customers use multiple banks, so they know they need to go the extra mile when it comes to connecting with customers.
They do this by taking advantage of the CRM's social media connectivity, so that they can always stay in touch and be accessible to those who need them.
They also use CRM to ensure that those who come to them with concerns are quickly connected to someone who can provide a solution.
In the words of Steve Ellis, director of the Wells Fargo Service Group, "We see the cloud as a way to help people connect with customers, connect with products in construction and connect with risk management practices."
