By EsaTihilä, CEO at Basware
Business productivity is a fundamental challenge and World Productivity Day on 20th June should provide an opportunity for more organisations to talk openly about it. It’s something that economists, CEOs and line of business managers alike are looking to address on a daily basis.
Despite the last recession being firmly in the rear-view mirror, productivity in many prominent countries is way down. In the US, national productivity levels are likely to fall for the first time in 30 years with the GDP per hour set to drop by 0.2 per cent, while the UK’s productivity gap, in comparison to other nations, is the largest it’s ever been with a difference of 18 per cent. The outlook for emerging markets and the rest of the world isn’t much better.
To tackle this issue, the UK government implemented its UK Productivity Plan in 2015, which promotes the adoption of digital technologies and aims to cut through £10 billion of red tape. With these measures in place, the government is hoping to match the productivity level of the US, which would boost UK GDP by 31 per cent. One year on from its introduction, the UK Productivity Plan has yet to have an impact on the UK economy though.
There’s no one-size-fits-all solution to improving global productivity, but there are measures that governments and companies can put in place themselves to help fuel their output and efficiency.
One way to maximise productivity is through technology that automates admin-intensive tasks. Giving staff the tools to work faster and smarter is an obvious way to improve productivity. Finding tasks that can be effectively done with minimal human interaction frees up time for employees to focus on other business-critical work where their expertise is more essential. This not only increases the capacity of the workforce but also increases the value of employee’s output.
Digitisation has been an undeniably powerful force within the workplace. It speeds up processes that rely on moving paper (internally or through the post) and breaks down corporate silos by enabling and encouraging greater collaboration. When employees are part of this more collaborative, fast moving environment, they can achieve a lot more. Fast-moving, shared information means better decisions are made more quickly and tasks are completed more seamlessly. This applies internally, but also externally with partners, buyers and suppliers.
For example, many companies are turning to electronic invoicing and process automation to boost productivity. E-invoicing accelerates payment cycle times, increases predictability and gets cash flowing faster across a supply chain. It is an example of how a previously time consuming task like chasing invoices can be successfully automated. Through invoicing automation, the process of moving money is sped up, as is the workload capacity of employees in the financial team. With e-invoicing, businesses have peace of mind that they will be paid on time which, in turn, allows employees to get on with their jobs.
Many discussions around productivity focus on output, particularly industrial. The productivity of non-production processes are essential as well, as they improve efficiency and reduce unnecessary costs. This can have a knock-on effect on output as well though.
A manufacturing company that can process invoices and collect payments more quickly has a stronger cashflow position. This position can enable it to invest in processes, tools or materials that will increase its overall output. Not only will this contribute to national productivity figures, but it also creates a revenue generating opportunity for these organisations.
Additionally, e-invoicing also significantly speeds up the movement of cash, which, in turn, helps smooth out complications and problems in the economy. Free-flowing capital helps promote trade, especially amongst smaller businesses, for whom cash flow is a key determining factor of financial stability. Making SMBs more effective in how they deal with their finances also fuels company growth and supports the wider economy.
Despite government support, boosting productivity still starts at home for many businesses. As a rule of thumb, productivity is only going to improve if employees have the right tools to be more effective in their roles. World Productivity Day presents companies with a great opportunity to evaluate their current practices and identify shortfalls that they can remedy if they want to boost their productivity.