Managers are always pushing their employees to do more with less. The best managers will continuously look for opportunities to streamline bloated processes and reduce operational overheads. Unfortunately, managers are just as likely to become too busy with everyday issues and may no longer have the bandwidth to carry out strategic reviews of department workflows. Many managers only focus on their immediate mandate, which may not always align with broader business strategies.
Internal efficiency audits can help organizations identify ineffective business processes and reduce wasteful practices in the company. There’s a common misconception between auditors and managers about the primary purpose an efficiency audit. While 85% of internal audit professionals believe the exercise provides insights into a company’s effectiveness and efficiency, only 10% of executive stakeholders hold the same view.
Start the New Business Year Off with an Efficiency Audit
The best time to schedule an internal efficiency audit is before the start of a new business cycle. This will give the company access to a robust set of data that illustrates its performance over the last year. As the business world is speeding up, regular reviews can quickly show where a company is lagging behind its competitors.
A strategic review of a company’s network security, departmental processes, and technology adoption may help identify new opportunities for improving the business workflows and increase revenues. If the company doesn’t review their internal work processes periodically, the risk of falling behind their competitors increases exponentially. It could also lead to vulnerabilities in systems and networks that criminals can use to compromise operations.
Why Conduct Internal Reviews or Efficiency Audits?
Internal audits can focus on a variety of business functions in the company. This includes security of the company’s network and information, business continuity/disaster recovery, operational efficiency, identifying areas where cost savings are possible, and more.
Some of the benefits an internal efficiency audit can bring to an organization include:
- Analyzing the latest performance data to help develop a process of continuous improvement
- Comparing current operational workflows and processes with industry best practices
- Gap and overlap analysis between departments and business units
- Studying the roles and functions in departments to reduce costs or increase operational efficiency
External companies are better suited to identify issues with the company’s operations. Every business function can benefit from using an industry expert to review their current processes and identify corrective actions that can help streamline daily workflows. Another area that presents a concern for today’s companies is cybersecurity. New attack strategies and technologies pose an existential threat to modern businesses. Using external experts can help companies prevent a cyberattack from succeeding and putting their operations at risk.
Internal Audit Tips to Improve Organizational Efficiency
Any internal audit should align with the company’s overall business goals. Depending on the exact subject matter, companies can identify ways to improve their customer service, process efficiencies, or carry out a complete security audit. Ideally, the company will know what they need to achieve in the coming year and will define its audit requirements to focus on those operational areas.
To ensure the audit serves the business’s needs, they should:
- Understand the business function and processes by evaluating performance against strategy
- Ensure the audit results focus on adding value to the business
- Be aware of the latest technologies that can help the organization achieve its goals
- Recommend the necessary corrective actions or mitigate risks by updating insurance policies
Depending on where the company lagged during their previous cycle, they can choose to carry out operations, IT, financial, or compliance audits. Compliance audits will indicate where departments failed in their duties while reviewing IT operations could highlight areas where the company’s technology is no longer serving its business needs.
Depending on the outcomes, the company will usually gain insights into areas where they are succeeding and those where they aren’t keeping up with competitors. The business should also consider carrying out a follow-up audit once they’ve implemented the recommended corrective actions.
Understanding the Business Risks of the Future
Audits primarily seek to improve a business’s health and wellbeing for sustainable future operations. Mitigating existing and emerging risks can help a company weather the direst of storms that would put other organizations out of business.
Companies need to understand what risks their organization will face and put the necessary contingencies in place to survive in the future. For improved operational efficiency, businesses can use an efficiency audit to review existing processes and implement new controls to streamline workflows.
CDS Office Technologies work with organizations to understand their problems and recommend innovative solutions that help them achieve their strategic business goals. Taking the time now to review and improve their processes and technology stacks can assist businesses with weathering the economic pressures of the coming decade.
To request an assessment of your company’s processes or to schedule an efficiency audit of your business workflows, reach out to CDS Office Technologies today.