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Raise your game:
Focus on the pain points in your processes to boost efficiency and value at the same time

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You don't have to sacrifice business value in order to cut costs. Innovating around internal processes can achieve both.

In times of uncertainty, leaders naturally look for efficiencies. Whether focused on people, processes or business lines, any changes need to be carefully considered to avoid doing more harm than good.

A 2012 study by the University of Texas found that companies that made mass layoffs suffered a drop in profitability still in evidence three years later – and it had no positive effect on their stock price. Not only do layoffs diminish organisational knowledge that is expensive to replace, they also threaten the engagement and performance of the surviving workers, researchers have found. 

The same is true of blanket cost-cutting drives, according to IT analyst company Gartner. “Across-the-board cuts penalise the more efficient parts of your organisation (demotivating those teams) and can result in eroding important sources of value,” the company recently warned.


A better way to reduce costs

Instead of scrapping something entirely, reimagining or innovating within the confines of a process can be a more effective way to cut costs. It offers fertile ground to not only drive customer and business value, but also make employees' lives easier and more efficient. 

“We often use the Service Design approach to find opportunities for efficiency in the round, whether they are customer-facing or operational,” says Adam Schanfield, vice president for strategy and innovation at Kin + Carta Americas. ”It’s always better to contextualise potential actions in the overall customer value proposition or experience, so that we can fully understand the trade-offs.” 

By using a holistic lens such as Service Design and digging into pain points and root causes, leaders can not only identify areas for improvement, but also address the complex sources of waste across the organisation - from how customers experience and engage with your products and services, all the way down to distribution, fulfilment and supply chain.

Instead of scrapping something entirely, reimagining or innovating within the confines of a process can be a more effective way to cut costs.

Incremental customer experience innovation

When looking for efficiency in how you attract, convert and serve your customers, digital innovation offers big opportunities and clear return on investment. Small improvements to the digital customer journey can generate a huge impact, as well as increase your marketing, sales and customer service performance.

There’s no shortage of tools to support optimised digital journeys, from virtual assistants to chatbots leveraging conversational AI. And by rapidly experimenting with these innovations, businesses can quickly find out where the value lies. 

“Our ultimate goal is to not invest any significant costs and resources into building and releasing anything which has not been through some form of controlled trial first,” says Chris Regan, optimisation director at Kin + Carta Europe. 

For web and app experiences, it is a commonly cited statistic that just two out of ten experiments provide a positive result. It’s therefore better to test something in a controlled environment – which technology allows you to do cheaply and accurately – so that massive investments don’t face an 80% chance of failure. 

“The process of experimentation also comes with efficiencies in how we use team time and resources to drive business value. This approach removes the risk of wasting hard-earned development resources on things that will not move the dial or, worse, will damage business performance,” Regan adds. 


What to do with low-value tasks? 

Processes for collecting, accessing and analysing data can be onerous and inefficient, increasing the cost of managing data while reducing the value extracted from it. This is a great place to look for innovative efficiencies. 

Automating the collection and processing of data can help, especially in areas of the organisation where value could be realised more readily and reliably. 

There are signs of this emerging in the legal sector, says Justin North, director at Pickering Pearce, a consultancy that advises law firms on digital transformation. Until the industry reinvents itself, it is an environment where lawyers’ time is money, he explains, and ambitious firms use automation in both delivery and operations to liberate lawyers from administrative tasks. Document-related tasks are already widely automated, North says, and now larger firms are automating back- and middle-office functions as well.

“No one wants to have a lawyer doing repetitive, low value work: not the firm, not the client, not the lawyer,” he explains. “It limits their progression as a lawyer and stifles their creativity and commercial development.” 

Meanwhile, firms are beginning to analyse past legal disputes to predict the outcome of future cases, in what North and others describe as the ‘Moneyball’ approach to legal practice. “Obviously, if you can predict an outcome, and the costs associated with getting to that outcome, you can give clients a better idea of whether or not they should even start down a certain path. And it’s less based on intuition and more based on fact. Smart firms are chasing this hard.” 

This combination – more efficient legal teams working on cases they are more likely to win – shows how efficiency- focused innovation can lead to more profitable value propositions.

Similar trends are emerging in healthcare and financial services. Kin + Carta has supported health insurers in the US following the No Surprises Act of January 2022, which obliged them to quickly update the contact details they hold for healthcare providers. Doing so manually would have been costly and time consuming but, for some insurers, it was the impetus they needed to transform their processes by supplementing or replacing tasks with automation. 

To get started in supporting health insurers, Kin + Carta developed an AI-powered voice bot that calls healthcare providers to request their latest contact information, using natural language processing to transcribe the response. The contact details are then automatically updated in the insurers’ database.

“In addition to the cost savings, employees are relieved of the tedious work of calling providers and empowered to focus on higher-value work,” says Kevin Gumz, portfolio delivery partner at Kin + Carta.

Access to data is also ripe for innovation. In many organisations, valuable data is scattered among hundreds of spreadsheets or siloed databases, limiting its potential to be exploited and creating unnecessary work for decision-makers who need it. By building a self-service data marketplace, one global consumer goods company was able to give its employees access to data and insights through an e-commerce experience. Not only has this accelerated access to data, it has also saved the company millions by eliminating duplicate subscriptions to external datasets.

Mountains formed from pixels
Access to data is ripe for innovation. In many organisations, valuable data is scattered among hundreds of spreadsheets or siloed databases.

Innovating operations

It is not only administrative processes that can be made more efficient and more valuable through digital innovation. Embedding data-driven intelligence into physical operations can achieve the same. 

Take supply chains, for example. The Covid-19 pandemic revealed that ‘just-in- time’ supply chains, in which materials and goods are passed along linear supply lines as and when they are needed, are vulnerable to system-wide shocks. Many businesses found themselves unable to fulfil customer orders and their margins decimated by skyrocketing prices.

To be resilient to these shocks, supply chains must become more data-driven, so that goods and materials can be routed to where they are needed most. Kin + Carta recently worked with a global consumer goods company to deploy machine learning to improve the accuracy of product-level demand forecasts. A 12% improvement translated to a $2.7 billion cost saving in just eight months. 

There are also untapped opportunities for innovation around sustainability. Under pressure from customers, investors and regulators, businesses are taking increasing effort to track and measure their emissions. Often, this is a siloed operation, focused solely on sustainability reporting or compliance. This is a missed opportunity, says Jared Johnson, director of digital strategy at Kin + Carta. “It’s a mistake to think about tracking carbon in isolation.”

Instead, carbon should be seen as a leading indicator of inefficiency within the organisation: where there are undue emissions, there is wasted effort. Tackling emissions in the context of efficiency can make business processes more productive, as well as less harmful to the environment.


A new approach 

As these examples demonstrate, digital innovation offers ample opportunities to drive efficiency while increasing – not destroying – your ability to create value. The key to identifying these opportunities is to ask the right questions up front and ensure you have the right context to make smart, informed decisions toward iterative efficiency, says Morgan Kainth, director of strategy and innovation at Kin + Carta Europe. 

Where are the hotspots for inefficiency in how you win and serve customers? Which support teams or business functions are most stretched, and why? What are the business questions that get a different answer from every team or person you ask? Where are the biggest time lags in your processes?

From there, you identify the areas most ripe for change to drive efficiency, but it’s not a ‘one-and-done’ project. “Leaders need to scrutinise the ‘how’ of the change as rigorously as the ‘what’,” Kainth explains. “To de-risk investments in efficiency, we have to think about how to release value as quickly as possible and validate our approach to change as we go.” 

By starting small and iterating frequently, organisations can understand what impact, if any, is resulting from their efforts. Regardless of whether the organisation is measuring carbon, automating a call centre or reskilling employees, decisions have to be made with facts, with data and in small steps. Anything else is nothing short of a considerable risk to the business's bottom line and future competitiveness.


■ Turn your efficiency drive on its head – think about making your employees more productive and engaged as though you were delivering a customer need. 

■ Driving efficiency doesn’t have to mean reducing capacity for growth – find where slow and laborious processes are getting in the way of value and use technology to eliminate them. 

■ Small and simple steps add up to transformative efficiency gains – make frequent changes, measure the impact and iterate quickly.


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