According to Morgan Stanley, by early 2024, the buzzword “operational efficiency” was mentioned in US earnings calls more than ever. It’s a great word, and an even better practice. Businesses that practice efficiency run leaner and are more agile and therefore more profitable. 

Practicing operational efficiency feels like a no-brainer—it’s a strong secret sauce for success.

But what exactly is operational efficiency, and how can it impact reporting and finance? 

We’re glad you asked. 

What Is Operational Efficiency?

First, it helps to understand what operational efficiency is. 

Operational efficiency, boiled down to basics, is how well your organization is using its resources. 

Efficiency is not to be confused, by the way, with productivity: You can be efficient but not productive, and productive without being efficient. Are you using resources well but not producing much? That’s high efficiency without much productivity—which isn’t necessarily a bad thing, if you’re a smaller scale org that produces a limited quantity of high-quality goods. But if you’re productive without being efficient, it’s highly likely your org is producing a lot while also wasting a lot (time, resources, etc.). 

While productivity can be good (doing more work faster), working efficiently (high-quality work with fewer wasted resources) is much better.

Got that? Good. Here’s what’s next. 

Why It’s Important

Operational efficiency’s importance can be boiled down to “do more while wasting less,” but it’s not just that. What happens when you do more while wasting less? Well, you can lower costs and improve profitability. When you’ve got more money, you can invest in new innovations and new technology. Those in turn can create agility, opportunity for expansion and growth, and long-term sustainability. You might end up with better quality control and outputs, boosting your reputation in the eyes of customers and investors alike. 

Cultural change can also come out of operational efficiency via refining aspects like inventory management and production processes. When you give teams the power to make solid data-driven decisions, they can feel more empowered and engaged. 

Efficiency and Technology

A lot of your work toward building efficiency, especially when it comes to tasks for your finance team, starts with technology. 

You might think your processes are straightforward, but they probably have complexities and inefficiencies that are hurting both your productivity and your profitability. So first, you need to identify and eliminate bottlenecks to simplify those workflows and maximize the value of every resource you’ve got. 

Technology is a huge contributor to operational efficiency, but there’s a caveat there: The effectiveness of the technology you use will be in direct proportion to how well it’s implemented and integrated with your existing processes. Recent data showed that CEOs believe about 40% of time spent on routine activities is inefficient, which could lead to as much as $10 trillion in lost productivity. So, when looking at bolstering efficiency with tech, look for tools that can automate your most manual processes.

You can also drive operational efficiency by monitoring and analyzing performance through data analytics. This is a guaranteed way to find where you need to make improvements. Your data analytics will give you a clearer sense of where to act and how. Want early visibility into potential issues? Take a look at predictive analytics and real-time dashboards. This can also help you be more proactive and less reactive. Want to uncover patterns in performance trends or find places for process optimization, cost reduction, and innovation? Try big data analysis. Your data is going to tell you a lot about your operational efficiency (or potential lack thereof) if you’ve got the right information to look at in the right way at the right time. 

So What Does This Have to Do with Excel?

You knew we’d get around to it eventually. We are an org that is driven to produce integration applications that help you build efficiency into your finance team’s day-to-day work. If achieving operational efficiency is all about enhancing your efficiencies and improving productivity, then we fit right in. 

How do we do that? 

By taking the business applications you work in most often—Excel, NetSuite, Salesforce, Hubspot, and more—and making them even more efficient through easy-to-use no-code integration. 

Here’s a real-world example:
MacKenzie-Childs runs omnichannel sales across catalog, ecommerce, home shopping channels, major department store retailers, third-party resellers, and their own international flagship and independent retail stores. Reporting on all of those, even with the help of NetSuite data, was an intensely manual (inefficient!) process with Excel templates that took up to 20 hours per week to complete. 

Not ideal. Or efficient. Zero resiliency. 

Then they got ExtendInsights, which seamlessly integrated their NetSuite data directly into Excel. Numbers flow into their Excel templates automatically and can be refreshed on demand for a to-the-moment view of what’s going on in the business. Doing more with less waste has let MacKenzie-Childs free up over 1000 hours per year for deeper analysis. 

Or how about this one:
ClearStar continuously refines how it works with NetSuite data, adding new custom fields, putting slices and flavors on the data to make reporting easier. Which all sounds great, until you find out that their finance lead was manually updating values in NetSuite. Not efficient at all, and certainly not pointing to resiliency if they needed to recreate any data. 

But with ExtendInsights’ upsert capabilities, ClearStar can quickly update the necessary fields in Excel and write the data back to NetSuite—without using a CSV file. Bonus? The ExtendInsights upsert process includes instant validation so you can correct data right away rather than waiting for the entire upload to finish . . . and fail. Processes that were previously taking up to a week are now down to about 20 minutes.

Boost Your Operational Efficiency Now

We’ve said a lot about operational efficiency and how we can help. What’s next? Try it for yourself. Get completely free, no obligation access to ExtendInsights for two weeks and see how Excel and NetSuite integration boosts your operational efficiency. Get started here.