Why Business Efficiency is Important and How Digital Platforms Improve It
Each industry is a competitive space, and every business strives not only to stay ahead of the competition but also to stay relevant in the long run, despite the rapidly changing customer environment. To keep up with the game, a company needs to implement various strategies, including being efficient. For a business, efficiency is about getting the most out of its resources to produce more. Following a webinar by Tech in Asia x Telkom DWS, in this article, we’re going to take a look at business efficiency and how digital platforms today play a key role as its enabler.
Why do businesses need to be efficient?
There are three main reasons why efficiency is essential for a business: cost reduction, constant growth, and customer satisfaction. Efficient daily operations help businesses increase their productivity, improve their output — products and services, and remove time-consuming tasks. Efficiency done right eliminates the need to hire too many third parties, deploy too many systems and equipment, and recruit too many people, leading to reduced costs. With fewer expenses and more time, companies can focus their capital, resources, and attention to other business critical requirements and see more opportunities to grow. Finally, all of those will allow businesses to offer their customers a better experience and ensure their satisfaction.
How should businesses measure their efficiency?
There are more than one way and metrics to measure business efficiency such as revenue per employee, inventory turns, or asset turnover. However, for Fanny Limassa, the VP Product (Marketplace, Logistics, and Core Platform) of Bukalapak, they all lead to Return on Investment (ROI). ROI shows that any investment made is proportional to the benefits gained; they need to make sense. Meanwhile, for Dhenu Wiarsandi, the Head of Payment Product Group at LinkAja, everything leads to impacts. Businesses need to be impactful especially to their stakeholders, meaning their users. It’s also important for businesses to measure and find out which products are impactful and how they are impactful. This way, they can focus on improving those specific products or, if necessary, innovating new ones, instead of wasting their time developing ones that don’t impress their users. This is how businesses tell that they have been efficient.
What are the challenges in ensuring business efficiency?
Some challenges in ensuring business efficiency have been around for ages. However, in the era when companies rely heavily on technology and the internet, new challenges emerged. One of the most common yet the most expensive issues is downtime. According to Gartner, the average cost of IT downtime is $5,600 per minute. Downtime prevents businesses not only from providing maximum service to their customers but also from functioning internally. This can lead to lost revenue, reputation, customers, and productivity, and that is why downtime is costly.
How do digital platforms — especially cloud and data center services — improve business efficiency?
Using cloud and data center services improves business efficiency in a few ways. With the concept of shared facilities and flexible pricing, both services offer companies a way to reduce their capital expenses and operational expenses while still receiving all the benefits. Both services also allow better scalability in the case of business expansion. What’s more, with multi-layered security measures, both services ensure data protection and minimum risks from attacks and breaches. Finally, and most importantly, the right cloud and data center service providers help companies minimize downtime. As stated by Anton Timur, the Executive Account Manager of Tribe Digital Platform at Telkom DWS, downtime has to be minimal; it should never happen if possible. For downtime mitigation, most providers deploy reinforced multi-layered components, including bandwidth, connectivity, power sources, and cooling systems, which ensure over 99% uptime and better availability. Telkom Indonesia’s neuCentrIX, for example, relies on 14 data center facilities which are located across Indonesia, so if one data center is down or inaccessible, another facility in another location can take over its responsibilities and become a recovery data center. According to Anton, even during electricity blackouts, neuCentrIX’s clients don’t experience downtime.
How can businesses choose the right digital platform providers?
Fanny Limassa and Dhenu Wiarsandi shared a few tips on choosing the right digital platform providers. Before considering their options, companies should establish their requirements based on their situations, including their products/services, the value they offer their clients, and their future plans. Once the needs are established, businesses can start looking for the provider with the best portfolio and product range. It’s important to see not only how committed and focused a provider is but also how innovative it is in its field.
Efficiency has always been vital for a business, and each company has their own strategies. Nonetheless, today, digital platforms have been a major requirement for a business to run well. With their capacity to optimize companies’ digital activities, digital platforms have become a fundamental tool to reduce costs, bring in more revenue, and improve customer satisfaction.