Companies, small and large, are potentially losing millions of rands to human error, or employee misunderstanding, by its more diplomatic name, says Mark Robson, executive director and co-founder of PRP Solutions.
This is defined as actions by employees who have misunderstood or misinterpreted company policies, business processes, job functions—or a combination of the three.
Apart from the financial loss, the cost of intangibles – trust and reputation – could have even greater consequences. If we could put a price to this, the numbers can be huge. We’ve seen that one of the greatest risks to the success of any business is human error. The blunders, which are often caused when employees misunderstand key aspects of their job, are commonly overlooked by management because the damaging results are underestimated. Preventable human errors rob companies of profit and resources at every level of an organisation. They undercut quality, safety, IT security and customer service. They create waste in otherwise useful systems and negate the return on investment from training, processes and procedures.
In general, there are two different types of human errors. The first focuses on errors made at a management level, referred to as a strategic or tactical error. These are the errors that have seen many companies fail due to management not making the right decision at the right time.
Back in 1975 when Steven Sasson, a Kodak engineer invented the first digital camera (filmless photography), management’s initial response was ‘‘that’s cute – but don’t tell anyone about it.’’ Little did they know that filmless photography would take off a few years later and that Kodak could have been at the forefront of this innovation.
This is a classic example of a strategic error, with Kodak management’s inability to see digital photography as the technology of the future. Kodak filed for bankruptcy in 2012 and has been trying to resurrect itself ever since.
The second type of error is referred to as processing errors. This is where people make mistakes when dealing with information that needs to be manually processed. Processing errors are an enormous problem as they often occur when employees lose focus whilst handling a repetitive and mundane task.
Often when errors occur in an important data capturing task such as the manual processing of payroll, mistakes are picked up too late. In most instances managers only get to see relevant reports at month end after mistakes have occurred and staff have already been incorrectly paid. But with the correct technology solutions, processing errors can usually be prevented.
A management tool such as our offering at PRP Solutions can help to eliminate strategic and tactical errors, as well as processing errors in an organisation. Management errors are prevented by providing managers with real time data that enables better decision making.
Processing errors are eliminated by automating mundane and repetitive tasks and executing these rapidly and accurately, using technology. Managers face a number of key pain-points of people management. These can be addressed by implementing innovative solutions that are designed to deal with these types of challenges.
Think for a moment about a company with large employee numbers where its managers have to deal with issues such as payroll, managing labour costs, ensuring productivity, overstaffing and understaffing of teams, contracts and risk management.
Managers need to make sure that they are able to manage and control the productivity of their employees which is where real-time reporting on employee adherence comes to the fore. Planning an employee productivity schedule enables managers to know at all times who is at work and who is absent. Based on this simple solution, managers are able to manage and plan both individual and team productivity.
When it comes to people costs, companies often experience difficulties in adhering to and managing budgets. This could be due to overstaffing of teams or overtime costs that are out of control. Our solution is to establish a three-level visibility on labour costs (budget, operational plan and actual) and enable managers to take immediate action when a variance to budget or plan occurs.
We also provide easy-to-use employee scheduling and tracking tools. The benefit of this solution is that it allows efficient management-by-exception by reporting on actual versus planned data.
Many companies struggle with stubbornly high back-office costs, often due to manual methods of capturing payroll and financial data, and human errors resulting in unnecessary queries and further rework.
There is a clear need to reduce back-office costs through process automation.
Rules based on the requirements of the company are configured for the different divisions where data needs to be captured. Each client has its own set of rules to suit its specific needs. This is the same for HR-related issues, where a sophisticated rules engine ensures compliance with employment contracts, the company’s HR policies and labour regulations.
It is important that these companies have solutions that track risk management in real-time and this is what the PRP solution provides.
It is important that the management teams dealing with these solutions understand how they work. A good way is for companies to add this to their employees’ KPIs in order to measure success.
Avoiding the high cost of human error
By Mark Robson, executive director and co-founder of PRP Solutions
Companies, small and large, are potentially losing millions of rands to human error, or employee misunderstanding, by its more diplomatic name. This is defined as actions by employees who have misunderstood or misinterpreted company policies, business processes, job functions—or a combination of the three.
Apart from the financial loss, the cost of intangibles – trust and reputation – could have even greater consequences. If we could put a price to this, the numbers can be huge. We’ve seen that one of the greatest risks to the success of any business is human error. The blunders, which are often caused when employees misunderstand key aspects of their job, are commonly overlooked by management because the damaging results are underestimated. Preventable human errors rob companies of profit and resources at every level of an organisation. They undercut quality, safety, IT security and customer service. They create waste in otherwise useful systems and negate the return on investment from training, processes and procedures.
In general, there are two different types of human errors. The first focuses on errors made at a management level, referred to as a strategic or tactical error. These are the errors that have seen many companies fail due to management not making the right decision at the right time.
Back in 1975 when Steven Sasson, a Kodak engineer invented the first digital camera (filmless photography), management’s initial response was ‘‘that’s cute – but don’t tell anyone about it.’’ Little did they know that filmless photography would take off a few years later and that Kodak could have been at the forefront of this innovation.
This is a classic example of a strategic error, with Kodak management’s inability to see digital photography as the technology of the future. Kodak filed for bankruptcy in 2012 and has been trying to resurrect itself ever since.
The second type of error is referred to as processing errors. This is where people make mistakes when dealing with information that needs to be manually processed. Processing errors are an enormous problem as they often occur when employees lose focus whilst handling a repetitive and mundane task.
Often when errors occur in an important data capturing task such as the manual processing of payroll, mistakes are picked up too late. In most instances managers only get to see relevant reports at month end after mistakes have occurred and staff have already been incorrectly paid. But with the correct technology solutions, processing errors can usually be prevented.
A management tool such as our offering at PRP Solutions can help to eliminate strategic and tactical errors, as well as processing errors in an organisation. Management errors are prevented by providing managers with real time data that enables better decision making.
Processing errors are eliminated by automating mundane and repetitive tasks and executing these rapidly and accurately, using technology. Managers face a number of key pain-points of people management. These can be addressed by implementing innovative solutions that are designed to deal with these types of challenges.
Think for a moment about a company with large employee numbers where its managers have to deal with issues such as payroll, managing labour costs, ensuring productivity, overstaffing and understaffing of teams, contracts and risk management.
Managers need to make sure that they are able to manage and control the productivity of their employees which is where real-time reporting on employee adherence comes to the fore. Planning an employee productivity schedule enables managers to know at all times who is at work and who is absent. Based on this simple solution, managers are able to manage and plan both individual and team productivity.
When it comes to people costs, companies often experience difficulties in adhering to and managing budgets. This could be due to overstaffing of teams or overtime costs that are out of control. Our solution is to establish a three-level visibility on labour costs (budget, operational plan and actual) and enable managers to take immediate action when a variance to budget or plan occurs.
We also provide easy-to-use employee scheduling and tracking tools. The benefit of this solution is that it allows efficient management-by-exception by reporting on actual versus planned data.
Many companies struggle with stubbornly high back-office costs, often due to manual methods of capturing payroll and financial data, and human errors resulting in unnecessary queries and further rework.
There is a clear need to reduce back-office costs through process automation.
Rules based on the requirements of the company are configured for the different divisions where data needs to be captured. Each client has its own set of rules to suit its specific needs. This is the same for HR-related issues, where a sophisticated rules engine ensures compliance with employment contracts, the company’s HR policies and labour regulations.
It is important that these companies have solutions that track risk management in real-time and this is what the PRP solution provides.
It is important that the management teams dealing with these solutions understand how they work. A good way is for companies to add this to their employees’ KPIs in order to measure success.
