How to Identify Opportunities to Improve Operational Efficiency with Tech
A new theoretical framework: Business segments, investigative methods and practical approaches – this is how to spot opportunities to improve operational efficiency in your business
Looking to improve operational efficiency?
Every CEO and CIO knows operational inefficiencies are costly, but with endless tools and buzzwords promising quick fixes, how do you separate noise from real results?
Online, many proposed solutions focus on tools, which is really better suited to nimble small businesses. Larger organisations need a more sustainable, methodical approach, as tools can help solve problems, but only if you’ve identified the right ones first.
This guide introduces a new theoretical framework for uncovering inefficiencies in your medium-to-large business by first breaking down operations into key segments and then applying targeted investigative methods.
The aim is to give you a practical guide to identifying high-impact opportunities to boost operational efficiency in your business particularly while ensuring alignment with your long-term strategy.
Here’s how it works…
Step 1: Focus on Key Segments
Start by breaking your operations down into manageable segments (we’ve given you 7 segments as examples below)...
Each segment corresponds to core areas of the business where inefficiencies might be hiding. By focusing on these distinct segments, you can zero in on problem areas and assign ownership within relevant departments.
Key Segments and Associated Departments
Operations and Processes: Daily workflows, production cycles, and project delivery processes housed in departments/units like Operations, Production, Quality Control, and Project Management.
Technology and Systems: Tools, platforms, and systems powering operations and connecting teams, typically managed by IT, Digital Transformation, Software Development, and Data Management teams.
Customer Experience: Customer-facing activities like service delivery, communication, and satisfaction improvement are handled by Customer Service, Sales, Marketing, and CRM teams.
Workforce and Talent: Employee productivity, skill development, and engagement, managed by Human Resources, Learning & Development, and Internal Communications departments.
Supply Chain and Logistics: Movement of goods and materials, supply chain optimisation, and vendor relationships overseen by Procurement, Logistics, Warehouse Management, and Vendor Relations teams.
Financial Management (Optional): Financial workflows, reporting cycles, and cost management tasks handled by the Finance, Accounts Payable/Receivable, Treasury, and Budgeting departments.
Strategy and Leadership (Optional): Organisational goal alignment, leadership priorities, and decision-making processes led by Executive Leadership, Corporate Strategy, and Change Management teams.
Why This Matters
Breaking down the business into these segments not only simplifies the process of identifying inefficiencies but also ensures accountability. By mapping each segment to specific departments, you can more easily identify where responsibility lies and engage the right teams to take action.
Step 2: Investigative Methods for Spotting Inefficiencies
Once you’ve identified the segments, the next step is investigation.
Now, there are many ways to investigate segments for inefficiency and opportunities to improve operational efficiency. But we focused on the kinds of methods that most medium-to-large businesses should already report on or ones that are relatively easy to originate.
The following methods show where to find the necessary information and how to apply it:
Profitability and Cost Analysis
You might already have this information in your quarterly or annual financial reports, otherwise in budget variance analyses or departmental P&L statements. Investigate by: Reviewing financial reports, focusing on segment margins, Cost of Goods Sold (COGS), and overhead percentages. Use tools like accounting software or dashboards to isolate underperforming areas.
This approach has been used successfully numerous times, including by Dell in the early 2010s to transform their supply chain management.
Employee Feedback
You might have this in HR feedback tools, team meeting notes, or performance reviews. Investigate by: Distributing short pulse surveys with targeted questions like, “What’s one thing slowing you down?” or conducting informal interviews to uncover pain points.
This forms a vital part of quality management, as Coca-Cola showed in its continuous development initiatives.
Technology Utilisation Assessment
You might have this in IT department reports, procurement records, or software license agreements. Investigate by: Listing all tools and software currently in use and assessing for redundancy or underutilised features. Consult IT teams for usage stats or audit SaaS subscriptions.
This is a vital step, used by many, including numerous global consumer goods manufacturers looking to improve efficiency and agility.
Strategic Alignment Check
You might have this in corporate strategy documents, board meeting notes, or department-level goal trackers. Investigate by: Comparing each segment’s goals and resource allocation against the company’s overall strategic objectives. Engage leadership teams in alignment workshops or strategy reviews.
This was a vital step when Washington State in the US did their Lean process development in 2016 and 2017.
Lightweight Customer Journey Mapping
You might have some of the information to start building this in your CRM systems, NPS (Net Promoter Score) surveys, or customer service logs. Investigate by: Outlining the key touchpoints of your customer’s experience and identifying areas with delays or dissatisfaction. Use customer feedback and complaint logs for insights.
This is a powerful tool used by companies with some of the best customer-facing companies in the world, including Starbucks.
Leadership Pulse Survey or Workshops
You might have to set this up, using internal communications platforms, past leadership meeting minutes, or external consultants’ reports as a start. Investigate by: Conducting short surveys or facilitated workshops to assess leadership’s alignment and responsiveness. Focus on whether decision-making is timely and strategic.
This method was powerful for airlines like Icelandair in optimising operations while improving employee wellbeing.
Why This Matters
These methods leverage existing data most corporates already have, making them practical starting points for uncovering inefficiencies. By focusing investigations this way, you can generate actionable insights without exhaustive processes.
Step 3: Put it All Together to Identify Opportunities to Improve Operational Efficiency
Now that you’ve segmented your business and explored investigative methods, it’s time to combine them to uncover actionable opportunities. Below, we break down each segment, outline the most applicable investigative methods, and highlight a few potential red flags to look for to identify inefficiencies and opportunities for tech-enabled improvements.
1. Operations and Processes
Investigation methods to apply:
Profitability and Cost Analysis, and Employee Feedback.
What to look for:
Bottlenecks in workflows, such as approval delays or manual data entry.
Repetitive tasks that could be automated (e.g., payroll, invoicing, reporting).
Excessive time spent on low-value tasks that detract from strategic goals.
Examples of potential opportunities with tech:
Robotic Process Automation (RPA) to streamline repetitive tasks.
Workflow management tools to improve transparency and reduce delays.
2. Technology and Systems
Investigation methods to apply:
Technology Utilisation Assessment and Strategic Alignment Checks.
What to look for:
Redundant tools or overlapping software licenses.
Lack of integration between systems that causes delays or errors.
Underutilised features in existing platforms.
Examples of potential opportunities with tech:
Upgrading outdated systems or consolidating tools to reduce costs.
Implementing integration platforms for seamless data flow.
Training teams to maximise the value of current tools.
3. Customer Experience
Investigation methods to apply:
Lightweight Customer Journey Mapping and Employee Feedback.
What to look for:
Recurring complaints about response times, billing errors, or unclear communication.
Friction points in the customer journey, such as lengthy wait times or a lack of self-service options.
Gaps in personalisation or tailored service offerings.
Examples of potential opportunities with tech:
Implementing self-service portals to improve responsiveness.
CRM systems for personalised customer interaction.
Analytics tools to identify and resolve common customer pain points.
4. Workforce and Talent
Investigation methods to apply:
Employee Feedback, and Profitability and Cost Analysis.
What to look for:
High levels of employee turnover or burnout.
Inefficient internal communication that leads to duplicated efforts.
Lack of accessible training or upskilling opportunities.
Examples of potential opportunities with tech:
Collaborative tools like to streamline communication.
Digital learning platforms for upskilling and training.
HR analytics to predict and address employee retention risks.
5. Supply Chain and Logistics
Investigation methods to apply:
Profitability and Cost Analysis and Technology Utilisation Assessment.
What to look for:
Delays in delivery schedules or inconsistent inventory levels.
Over-reliance on manual tracking of shipments and orders.
High logistics costs compared to industry benchmarks.
Examples of potential opportunities with tech:
IoT-enabled devices for real-time tracking of goods.
Predictive analytics for inventory optimisation.
AI-driven route optimisation tools to reduce transportation costs.
6. Financial Management (Optional)
Investigation methods to apply:
Profitability and Cost Analysis and Technology Utilisation Assessment.
What to look for:
Inefficient processes in accounts payable or receivable.
High error rates in financial reporting or forecasting.
Delays in budget approvals or expense reconciliation.
Examples of potential opportunities with tech:
Automation tools for expense tracking and reporting.
Budgeting software with real-time collaboration features.
AI-based financial forecasting models.
7. Strategy and Leadership (Optional)
Investigation methods to apply:
Leadership Pulse Survey or Workshops and Strategic Alignment Check.
What to look for:
Misalignment between leadership priorities and operational goals.
Lack of visibility into key performance metrics.
Decision-making delays due to unclear roles or responsibilities.
Examples of potential opportunities with tech:
Dashboards for real-time performance monitoring.
Digital tools for leadership collaboration and strategic planning.
Workflow automation to streamline decision-making processes.
How to Prioritise Opportunities
Not every inefficiency in every segment is worth fixing immediately. To focus on what matters most, use a scoring system:
ROI (Return on Investment): Estimate the financial impact of fixing the inefficiency.
Strategic Alignment: Assess whether the opportunity supports long-term business goals and which segments are the most crucial right now.
Ease of Implementation: Prioritise quick wins that require fewer resources.
Example: High cost + low alignment = deprioritise. High ROI + high alignment = prioritise.
Tips for Effective Implementation
Start small: Focus on one segment or a single inefficiency to build momentum.
Involve teams early: Engage employees in the investigation and decision-making process to ensure buy-in.
Leverage data: Use data-driven insights to guide prioritisation and measure success.
Monitor and adjust: Continuously evaluate the impact of changes and adjust strategies as needed.
We will continuously be adding to and building off of this theoretical framework, so if you have inputs, questions or suggestions, contact us here.
Need to unlock operational efficiency to keep you competitive and gaining ground?
Book a strategy session with the Octoco team.