The Capital
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The Capital

Revisit Your Processes — Eliminate Redundancies

This is a general guide to post-pandemic business management.

After a systems analysis, systems overview, and potential overhaul, which might lead to migrating to the cloud, and after integration of some of the systems using APIs, the business manager has to take up the task of revisiting business processes with a view to eliminating redundancies.

Even after integration, some processes will remain parallel to the integrated process when they are no longer needed. These processes and activities must be eliminated.

Redundant processes are an issue that flies under the radar in most organizations. It's insidious. In most instances, the business manager will never know the rot. The corrosiveness is never really assessed. And so, it goes on and on, unabated, leading to a monstrous organization with all sorts of complexities. The complexity remains even after business analysts and systems analysts have been hired to streamline the processes, integrate systems, etc.

Duplicate processes have to be eliminated, just like how duplicate files have to be deleted lest they cause confusion to the users and drag the performance of the computer downwards.

Eliminating redundancies will result in a sleek and smooth organization that is efficient at whatever it does. The company loses weight and gets fitter. This should be a task on the cards for the post-pandemic business manager.

The following are key activities involved in eliminating redundancies.

  • process mapping
  • business process automation (BPA)
  • eliminating steps that don't deliver value.

Process mapping ensures that you document all the processes that lead to outcomes that add value. Processes that are left out of the mapping typically don't add real value. The mapped process should be automated, if possible. this is where Business Process Automation comes in. The final step would be to eliminate those processes that were not included in “process mapping” and getting rid of the manual processes that were automated.

Examples of redundancies

  • parallel record-keeping — multiple sources of the truth.
  • parallel record-keeping — keeping a physical paper filing system in place, parallel to the digital one.
  • retaining manual processes alongside automated processes.
  • retaining wasteful and useless steps within the new process (relics of the old system and processes).
  • printing “things” after the company has embarked on a “Go Digital” mission.
  • printing a document that does not need to be signed, scanning it, and then emailing the scanned copy (NB* you could have pdf’d the doc and emailed it).

Parallel record keeping is a curse because it establishes multiple sources of the truth. The need to have one single source of the truth is more pronounced in the post-pandemic business environment. Every company will always have that guy, that department, that other office, that likes to keep their own records in their own parallel system (typically a spreadsheet). There is always a justification for why they do so. Some of the reasons include not trusting the official system to be always available, not trusting the veracity of the official system, not being able to pull a report in the desired format with desired fields from the official system, and lack of a particular feature on the official system.

The time consumed by keeping parallel records is wasted time. It adds up to “busyness” without adding value to the company. At the end of the day, employees are always busy, but the results don't correspond to the busyness.

Those who keep parallel records swear that they don't dislike the official system, and they promise to keep the official system updated all the time so that it matches their parallel system. However, in many cases, the company ends up with entries, records, and transactions in the parallel system that are not reflecting in the official system and vice versa. Thus, you end up with multiple sources of the truth, which causes confusion.

The above explains the perpetual conflict regarding sales stats between the Sales and Marketing department and the MD’s stats as derived from either the Accounts Team or the Data Analytics team. On any given day, in most companies, sales (revenue) declared by the Sales Team does not tie to the revenue reported by the Finance Team.

The difference is due to the sales team overstating sales by adding sales that have not yet been captured in the system onto their reported figures. Sometimes the difference is due to the accounting team raising certain invoices in the accounting system, but the transactions have not been captured from the source (the sales team), that is, they have not gone through the funnel. The other reason could be the sales team keeps a tab of their sales outside the official system.

Another example of parallel record-keeping is that guy who keeps filing things on his desktop parallel to the official filing place and filing system. Instead of keeping files on the server, Dropbox, or Google Drive, the guy keeps them on his desktop, and when he is done working on that file, he drags it onto the official filing place.

This is seemingly not counterproductive. However, the trouble comes when he forgets to drag and drop the desktop file onto the official filing place after making some changes. The point to hammer home is that keeping two copies of the same file in two different places is redundant. Aggregated across many files, processes, and individuals, the cost of this redundancy adds significant weight, inefficiencies, and complexities to the organization.

The second type of parallel record-keeping involves retaining the old physical paper filing system. Digital representations of most documents are now accepted by everyone (including the taxman), so there is very little need for maintaining a physical paper filing system. The pursuit of efficiency leads to the adoption of a digital filing system with better search functionalities and naming conventions. Once this is implemented, 90% of the physical filing system should fall away. It is redundant. Holding on to it is not proper risk management. It is denialism.

Retaining manual processes alongside the digital ones is another example of redundancies. Most companies that migrate to online cloud accounting solutions quickly realize that allocation of incoming receipts from clients is faster because of auto-matching functionalities whereby receipts are auto-matched to invoices. With most legacy accounting systems, this allocation involves the accounts team sending an extract of the bank statement to the sales team, so that they obtain the name of the client, and post the receipt to the correct Debtors GL account.

When a new process that improves the auto-matching functionalities is introduced, the old system of sending bank statements across the sales team for allocations should fall away. The new process might be as simple as just including notes to clients that they should use the invoice number as the reference. It might be as complicated as introducing an online payment solution (for example PayFast) that is integrated with the accounting system such that when a client pays for an invoice online, the payment platform records the receipt in the accounting system (performing 90% of the bank reconciliation process).

Whichever improvement introduced should result in the older process falling away. That’s what should happen. However, that is not what happens. Oftentimes, the old process is carried along, even when it is no longer relevant, and no one really uses information from the old process. Employees carry on doing things the old way because they haven't been told to stop doing it.

The most annoying type of redundancy comes from the old lady who keeps printing loads of paperwork, eventually destined for the shredder when a new process has apparently been put in place to avoid such. This is the old lady who prints a copy of the bank statement, places it on her right side, and prints the entire Supplier GL, places it on her left side, and embarks on the “allocation” or “reconciliation” process. This is done after the company has bought a second monitor for her so that she can make use of two screens, export items to excel, and work from there. The old process should be made redundant.

There are many examples of redundancies that need to be resolved by following due process at all times, no matter how officious and boring it is. That is the key to reducing complexity and waste.

Redundancies can never be eliminated totally (PS* you can never stop me from creating files on my desktop, you will have to fire me). The goal is to occasionally revisit processes and remove whatever has been made redundant. Continuous improvement is the goal.

The post-pandemic business manager should be knowledgeable regarding various business processes taking place inside his/her organization. He or she should be in a position to question the validity and relevance of some of the processes. He or she should be in a position to sanction the retirement of old processes. He or she should be able to eliminate most of the redundancies that drag performance downwards.

Ciao!

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