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How to Reduce Bureaucracy and Promote Innovation in the SoftDev Companies?

Igor Bagayev

itOutsourcingteam

As a software developer and CTO, I have experience in working in both one-man start-ups and large corporations. Regardless of how big the company is, almost every software development company has the problem of almost sinking into paperwork and wasting a lot of resources due to the lost efficiency. Sometimes at least part of the excessive administrative and paperwork is also a self-inflicted problem. 

In the meantime, I think you have noticed it too, the urge for constant innovation is increasing. At least since the triumphant advance of the new global giants such as Google and Amazon, it has been clear that inventiveness, the courage to change, and the ability to quickly bring creativity "onto the street" are among the key success factors in the digital world. The lack of time-wasting bureaucratic practices has a strong impact on the will to innovate and develop the company. 

Even small and medium-sized companies can therefore no longer leave innovations to chance - or their managers. This applies to all industries, but especially to companies whose core competencies include creative solutions in the field of digital transformation. This is the reason I decided to share my methods of reducing the bureaucracy in the company and optimizing working processes. 

The Essence of Bureaucracy

The essence of the bureaucracy is difficult to grasp. Because, simply, this is the perception of administrative activities. In everyday life, bureaucracy is associated with just paperwork. However, it is up to the beholder to decide from what effort the “paper mess” becomes “paperwork”. For many employees, some administrative activities are not at all bureaucratic, while for others or outsiders the same activities are perceived as extremely bureaucratic. What is certain, however, is that every form of bureaucracy is considered negative in the everyday sense of the word. In other words, the term will never get rid of its bad name. As a result, companies that are considered bureaucratic often suffer from a negative image.

The causes of bureaucratic structures

If the cause is to be determined or recorded by bureaucratic structures, then a quick explanation can often be found, because the reason for this is usually outside the company, i.e. due to the requirements of the state. Many companies see themselves helplessly at their mercy. Admittedly, this fact, whether it is called rule madness or not, cannot be discussed away. However, government rules and regulations are not the only cause of corporate bureaucracy. Because several causes are homemade when viewed self-critically and are rooted in ingrained processes that, because they work, are often not critically questioned. To put it roughly, two types of causes that affect companies can be identified: a “state” and a company-grown one.

It’s worth noticing, well-functioning accounting is the basis for a company's economic success. If this basis is not right, the company organization can fail. Customers and employees are becoming increasingly dissatisfied, processes are not profitable and the warehouse remains empty. However, these are just some of the follow-up problems that can result from excessive bureaucracy and the resulting misdirected bookkeeping. The following five tips can help reduce administrative overhead and help you focus on what matters most.

Tip 1: Do the accounting using software

Fortunately, there are more and more opportunities for companies to do at least a large part of their bookkeeping on the computer. There are complete solutions for this purpose, with which processes can be optimized and automated, like QuickBooks or Xero. This unites all processes so that resources can be used more efficiently and thus costs can also be reduced. Anyone who opts for such a solution has all business figures constantly in view and can view all data and documents with a click of the mouse. I consider it a first step on the way to increase efficiency and transparency.

Tip 2: Get rid of paper

Companies that do their accounting with a complete commercial solution automatically reduce their paper consumption. Nevertheless, there are other ways to get closer to the dream of a paperless office. There are also easy-to-use programs for ordering processes and vacation lists that help to record, archive, or share data without the need for paper. Furthermore, industry research from Gartner, Inc., estimates that as much as 3% of a company’s revenue is spent on paper, printing, filing, storing, and maintaining files of information. As you can see, it is worth cutting this spending off. 

Tip 3: Replace emails with lean collaboration platforms

I am sure that e-mails will continue to be irreplaceable in the future for communicating with business partners and other companies. However, most of the e-mails that land in one's mailbox every day come from internal employees. In the past, colleagues exchanged ideas at the coffee machine, now an email is written quickly. However, this type of communication increases the effort, while the benefit is lower. Companies should therefore use lean collaboration platforms that work in a similar way to WhatsApp or Facebook. Teams can use this to exchange ideas directly and easily. There is also the possibility of defining groups depending on the main topic or department so that a targeted exchange is possible. This also ensures that all information worth knowing is collected in one place.

Tip 4: Generate more mobility

Today, I would rather prefer more mobility in my everyday work. For example, a lot of us would rather choose a tablet or smartphone than want to access our desk. More and more employees choose to work independently of time and location, which is also known as mobile computing and believe that it increases work efficiency. Companies should therefore create the necessary prerequisites for this by digitizing processes and data and making them available in the cloud. Simply, make your life easier by using proper CRMs and saving all your data and documents in cloud storage. Also, there are now mobile apps for almost everything, including managing different working processes. They are easy to use, such as for vacation requests or travel expense accounting. This can also significantly reduce the bureaucracy in the company.

Tip 5: Combat silo thinking

"My project, my knowledge, my department" - This type of silo thinking is still very widespread among many employees. Although we tend to avoid collaboration with the ones who cannot share our common goals and values as a company, sometimes it happens. However, the above-mentioned tips on digitization and process reorganization can help to combat this silo thinking because the software cannot be stopped by knowledge and departmental boundaries. Instead, new structures are created that are based on real operational requirements. For example, in a company that operates an online shop, the IT department, production, inventory management, and accounting are forced to cooperate because they all work with the same data.

Giving space for innovation: simple principle

The basic principle of a structured innovation process is simple:

  • On the one hand, it is about opening up opportunities for employees and offering incentives to get involved creatively in company activities.
  • On the other hand, there is the economic risk to minimize that is involved in the development and implementation of an innovative idea.
  • This requires a system based on which you can evaluate the factors relevant for implementation, such as effort, risks, and market opportunities, in as much detail as possible.

First of all, favorable framework conditions should be created within which the workforce can - and will - actively participate in the creative process. There are simple ways to do this. For example, you can hold regular open discussions among employees on current technological or industry-relevant topics. You exchange ideas once or twice a month and collect knowledge, regardless of specific projects in the company. This strengthens team spirit and sometimes brings out ideas that otherwise remain under the surface in day-to-day business.

Targeted "thinking sessions" on specific topics, such as lunch or an evening workshop, are also helpful. Here an employee presents a current innovation project, for example, in a short keynote speech, which is then openly discussed. In times of Corona, video conference tools offer an alternative.

Systematic innovation process

A systematic innovation process must now ensure that ideas become innovation projects and ultimately marketable products, concrete improvements in the workplace or internal processes. Such an IT-supported process can look like this:

Step 1: An employee feeds his idea into the "idea storage tool". He or she gives the idea a title, describes it briefly, and names the potential benefits that can be realized with it for the customer/company. To systematize the whole thing from the beginning, the "idea storage tool" should be filled with standardized templates. It is important to keep it as simple as possible at the beginning so that the idea is captured and does not fail in the first step due to bureaucracy.

Important: The entire innovation process is open and transparent. This means that every employee has access to all ideas and information circulating in the "idea storage tool". Sometimes I even remind myself that my team members can view and comment on it and, if necessary, influence an idea with additional impulses as a result. In this way, the entire workforce can be involved in the generation and further development of ideas. Newly introduced ideas are discussed at the regular open rounds of talks.

Now follows the first of several so-called stage gates: The employee evaluates the information provided. Areas that are particularly affected by the idea or that can potentially benefit are ideally informed directly about the new idea. In the case of product innovations, for example, the sales team, which evaluates the innovation with its market view, is an important interface.

Conclusion

“Bureaucracy in the company” is not a catchphrase that we, entrepreneurs, are helplessly exposed to. Although the state is only relieving bureaucracy gradually, there are some ways to simplify internal structures and procedures. Digitization is an essential help here.

It is important for success that the innovation process is free of hierarchies because they would hinder the free development of creativity. Anyone can bring ideas into the process, and anyone can comment and influence them. As you saw, the combination of these two sets of practices allows me to successfully run Vilmate to the brightest future.

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