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Published on 05/12/2024

Identify Hidden Costs Draining Your Business in 3 Easy Steps

By Peter Holroyde

Identify Hidden Costs Draining Your Business

Hunting down operational savings has never been easier – discover how to identify, evaluate, and eliminate the costly issues sabotaging your business, using our tried-and-tested method for success.

Everyone finds themselves and their team bogged down by repetitive tasks that seem to eat away precious hours of the workday. You’re not alone. Most businesses struggle with friction points – those pesky inefficiencies that slow down operations and drain resources. The good news? You don’t have to live with them.

By following our proven 3-step process, you’ll uncover your operational hotspots, understand exactly how much they’re costing you, and identify practical solutions to tackle them. You’ll gain the confidence to suggest measured ROI for investing in fixes to these issues.

In this article, we’ll explore how to identify these friction points and score them for attention. By understanding where the bottlenecks are, you can measure potential cost savings and boost efficiency. We’ll also touch on process mapping as a tool for uncovering hidden issues (if you’re new to process mapping, check out our previous post on which notation to use). Plus, we’ll share insights from a new case study that demonstrates tangible improvements.

To make this journey even smoother, we’ve created an Excel-based workbook that simplifies each step, complete with a detailed guide to help you along the way, it’s yours – for free.

Ready to streamline your operations and save some serious time and money? Let’s dive in.

Spotting the Friction Points

First things first – what are we actually looking for? Friction points are areas in your operations where things aren’t running as smoothly as they could. They’re the tasks that make your team sigh every time they come up. We try to solve these problems using tricks like these…

How do you find these “hotspots”?

The exact methods you use will vary depending on factors such as the scale of your organisation or your area of responsibility. You may have resources such as business analysts available to set loose, or you may be the owner/director of a small business looking to investigate yourself.

In our experience, identifying friction points usually falls into two categories:

So, you may already be thinking about some of the “known problems” as you’re reading this. If so great! That’s a good place to start.

If you’re looking to go hunting for the hidden ones, here are some steps to uncover these issues:

Often when hunting for hidden issues, you have moments where you discover something that makes your eyebrows climb to the top of your head – “ah ha” or “wait what?” moments.

Score them!

For each hotspot you find, try to understand its cost to your organisation. A simple formula can help you get started:

Cost of Problem = (Hours spent each time × Cost Per Hour) × Frequency of the problem

Those costs are only part of the story though. Note down intangible costs too, things like customer frustration or negative brand perception.

Then think about any standing costs that make up part of the problem. Expenses, things like stationary costs, system costs. For example, you might be using a SaaS system that costs you X per month to do something inefficiently! Follow up with questions for your staff to make sure you understand all the moving parts of the hotspot. Put your detective hat on when something doesn’t sound right, or you feel you’re missing something.

Stories from the Field

Everyone loves to hear tales from the field! Sometimes, the most significant issues are hiding in plain sight, or are a bit of a shocker. Here are a handful of stories that hopefully make a point and get you thinking.

Finding the Fix

Once you’ve found some friction points, what next? Hopefully you are now able to prioritise them for which order they should be tackled in, and some of them might not reach the threshold where it’s worth changing anything.

Obviously, how you resolve them will heavily depend on what the problem is, what capabilities and tools you already have, and what the ROI numbers are.

For example, if you;

Already have flexible systems

If you have software that allows you to customise workflows, great! You’re ahead of the game. You might be able to make relatively low cost changes that make the ROI numbers easy.

Have a collection of off the shelf systems

If you’re piecing together off-the-shelf solutions that don’t quite mesh, or relying heavily on manual processes, it might be difficult to address. It might be time for something custom such as integration work, or a full bespoke (but flexible) solution.

You want to evaluate how you can;

 You can prioritise them based on:

It may not cost the earth to solve the problems, and sometimes a bit of lateral thinking could help. Have a read of this case study where we helped a client solve one of these friction points for a lot less investment than you might expect. It ticked the boxes across all of the prioritisation points above!

Ready to Uncover Your Operational Hotspots?

To make this process even easier, we’ve developed the Operational Hotspot ROI Workbook. It’s a foolproof 3-step system for capturing and calculating the ROI of potential fixes tailored to your unique challenges.

Want to measure the benefits of streamlining your operations?

👉 Download the Operational Hotspot ROI Workbook now

Peter Holroyde

About The Author

Peter Holroyde - Director

Pete brings robust security expertise backed by his credentials as an Offensive Security Certified Professional (OSCP). With his strategic vision, Pete ensures our software architectures are secure and scalable, underpinning our clients' trust in our solutions.