When times are economically challenging, it's especially important for businesses to examine their operations and work toward improving them. Increasing efficiency is not a one-off project – it's a purposeful way to ensure competitiveness. According to the German Chamber of Commerce and Industry (DIHK) Digitalisation Survey 2025, 65% of German businesses use digitalisation to make their workflows more efficient. They do so primarily to reduce costs and enable more flexible work models.

In this article, we explain what it means to increase efficiency. We cover some common reasons why businesses are less efficient than they could be and why increasing efficiency is particularly important during a recession. We also provide some concrete measures you can take to boost efficiency.

What's in this article?

• What does it mean for businesses to increase efficiency?
  
• Why do some businesses lack efficiency?
  
• Why is increasing efficiency especially important during a recession?
  
• Measures to increase efficiency
  
• Examples of efficiency improvements
  

What does it mean for businesses to increase efficiency?

In German-speaking countries, the Terms "effectiveness" and "efficiency" are often used synonymously. However, they are different from each other. For example, effectiveness describes the path to a goal. When analysing effectiveness, business owners should ask: "Are we doing the right things?"

Efficiency, on the other hand, is about maximising productivity without using extra resources. A business can evaluate its efficiency by asking the question: "Are we doing things right?"

For businesses, increasing efficiency does not mean achieving new goals or driving improvements. Rather, the aim is to refine existing processes, structures or procedures so the business conserves time, money, materials or human resources (HR) without compromising quality.

In a recent study, the McKinsey Global Institute (MGI) examined productivity growth in Germany, the US and the UK. The authors highlighted two key findings:

• Improvements are becoming increasingly important for business success.
  
• Efficiency remains important for business success.
  

For businesses in Germany, this means that remaining competitive – even in a difficult economic environment – must involve consistently questioning, refining and digitising internal processes. Increasing efficiency can reduce costs, shorten lead times, relieve the burden on employees or make businesses more resilient to crises. This doesn't always mean making radical changes. Many small improvements in the so-called "continuous improvement process" (CIP) can have major impacts when done simultaneously.

Why do some businesses lack efficiency?

Efficiency is a key to success for a business, especially in the highly competitive international market. However, many German businesses do not make optimal use of their efficiency potential for various reasons. A lack of efficiency is often the result of structures and processes that developed within the business over time. As time goes on, the business might no longer be able to keep up with the dynamics of the market.

Lack of structural adjustments

Businesses grow through new products and markets or the success of Individual business areas. This growth is fundamentally positive but also carries risks. For example, the business might add new tasks and responsibilities, but the underlying processes often remain untouched. Businesses might not have the time and resources to develop these growth processes. As a result, established processes no longer function with the usual efficiency.

Here's a typical example: A department grows from 5 to 20 employees in a short period of time. However, the structures, communication channels and technical infrastructure remain unchanged.

Unclear processes

If operational processes are not clearly and unambiguously defined, this can lead to misunderstandings, delays and unnecessary duplications of tasks. The lack of transparency can quickly become a problem, especially as the complexity of business processes increases or new employees need to be trained. Unclear process descriptions can make it difficult for team members to understand and collaborate with one another.

Lack of resource efficiency

To run efficiently, businesses must know which resources are available and where they're needed. A study commissioned by the Federal Ministry for Economic Affairs and Energy (BMWE) shows that many German businesses are trying to improve resource efficiency to lower production costs, reduce waste and protect the environment. From 2017 to 2021, German businesses took efficiency measures that ended up saving around 6% of the material originally required. A 2023 market analysis by the DIHK confirms this trend. According to the analysis, businesses see material savings as the greatest incentive for process adjustments.

Outdated technology

Outdated machinery, hardware and software can also cause businesses to be less efficient. Those who don't have the basic technical equipment are limited in their capacity to use modern technologies, such as artificial intelligence (AI). A 2025 survey of more than 550 German industrial businesses commissioned by the digital association Bitkom found that almost half of the respondents see a risk that German businesses will miss out on the AI revolution. However, 42% of German industrial businesses already use AI in production.

Inefficient supply chains

The COVID-19 pandemic and geopolitical tensions in recent years have shown the vulnerability of many supply chains. German businesses should closely coordinate production planning with suppliers. Backup solutions should also be used to ensure that production does not stop, even in the event of delivery bottlenecks or delays.

Lack of flexibility

Small and medium-sized enterprises (SMEs) in Germany are known for their specialisation. However, this strength can also become a weakness. Highly specialised production processes often lack flexibility. If demand fluctuates or requirements change, adapting processes can be costly or challenging.

Lack of qualified specialists

People in Germany often discuss a shortage of skilled workers in the country. They often overlook that there is a shortage of qualified staff in particular. Digitalisation and automation have placed new demands on employees. German businesses must either hire new staff – which takes time – or retrain and further educate existing staff. Otherwise, a lack of qualified specialists can negatively affect a business's efficiency.

Why is increasing efficiency especially important during a recession?

The German Economic Institute (IW)'s economic forecast predicts growth for all major economies in 2025, including China (4%), the US (1.3%) and the Euro area (0.8%). The German economy was the only one that recorded a decline (as of May 2025) and is expected to shrink by 0.2%. This means Germany remains in a recession. A decrease was already noted in previous years: Europe's largest economy shrank by 0.3% in 2023 and by 0.2% in 2024. This development is worrying for businesses in Germany, as the last time there were two consecutive years of recession was in 2002 and 2003.

In times of recession, it is important for businesses to increase their efficiency, as this directly contributes to their competitiveness. When sales stagnate or decline, refining processes and the associated savings can make a major difference. Increasing efficiency can also mean that businesses maximise the use of existing capacities and avoid waste.

Recession periods can also enhance future growth. Businesses that simplify and modernise their processes are often in a better position to get back on track quickly when the recession ends. Therefore, efficiency is a key factor for survival in an economic crisis. At the same time, it sets businesses on a course for sustainable success in the future.

Measures to increase efficiency

German businesses can take a variety of measures to increase efficiency sustainably. Fundamental changes can help build a foundation for success. Digital solutions can enable automation and the simplification of complex tasks, and continuous process enhancements can ensure that processes remain lean and flexible.

Fundamental changes to increase efficiency

Here are some recommended measures to increase efficiency that can help businesses tackle common reasons for inefficiency:

Clear processes

All work processes should be defined step by step. In general, operational processes can only run error-free when they are clearly outlined. This can help businesses avoid misunderstandings and delays. It is important to Review and adapt processes regularly, especially for growing businesses.

Functional resource management

Documentation and needs-based management of materials, personnel and capital can help conserve costs, prevent waste and avoid bottlenecks. For this reason, businesses should place great importance on effective resource management.

Reliable supply chains

Close coordination with suppliers is important for efficient production. A resilient supply chain can help avoid material shortages and delays. Businesses should also rely on diversified supply structures and backup solutions.

Employee qualifications

Increasing efficiency is not just about structural and technical aspects – the workforce also plays an important Role. German businesses must employ qualified specialists. Investments in continuing education and training can also ensure that the team works efficiently using current technologies and methods.

Digital measures to increase efficiency

Digitalisation can offer German businesses a wide range of opportunities to automate processes, save time and reduce costs. In addition to the obvious acceleration of work processes, digitalisation also enables better data quality and transparency. Here are some reliable measures to take:

• Automation of accounting processes: Tools such as Stripe Revenue Recognition automate the accounting of transactions on an accrual basis. This can enable businesses to record Revenue according to local regulations, promptly calculate their reserves and more quickly generate monthly statements.
  
• Digitalisation of Tax processing:Stripe Tax automatically calculates country-specific Tax rates, collects them correctly and provides all necessary documents for Tax refunds or audits. In this sense, businesses largely automate their Tax processing.
  
• Digital Payment processes: Businesses that plan to expand are particularly reliant on flexible Payment infrastructure. With Stripe Payments, businesses can accept payments worldwide and offer their customers locally preferred Payment methods. Automated Payment processing can easily be integrated into existing systems.
  
• Cloud-based applications: Cloud solutions can enable flexible access to data and applications. They promote cross-site collaboration, enable mobile work and can improve reliability through automatic backups and regular updates.
  
• Customer relationship management (CRM): Digital customer management can improve sales and marketing processes. A central CRM system helps record customer information in a structured manner and use it in a targeted way – such as for personalised quotes or automated sales follow-ups. Businesses can also process support requests more efficiently because the entire communication process is traceable.
  
• AI and data analytics: Intelligent analysis tools help businesses efficiently evaluate large amounts of data. They can analyse sales figures, inventory levels and customer behaviour in real time, allowing businesses to identify trends early on. AI-supported forecasts can make it possible to predict demand more accurately and proactively control production processes.
  

Process enhancements to increase efficiency

Targeted process enhancements can be effective for increasing the efficiency of a business. Here are some examples:

Automation of manual work steps

Building on the digital opportunities described above, businesses should identify manual routine tasks that automated solutions can replace. These can include recurring data entries, approval processes or internal notifications. Administrative areas in particular – such as HR, purchasing and warehouse management – can offer businesses the opportunity for significant efficiency gains with little effort.

Standardisation of processes

Businesses can monitor standardised processes more effectively than non-standardised ones, which can allow for more analysis and improvement. Standardisation can also reduce a business's dependence on individuals because clearly documented standards can help with delegation and automation. Standardisation can also facilitate collaboration between departments and help with training new employees.

Cross-functional collaboration

Better networking between departments – such as sales, logistics and accounting – can increase efficiency. Shared digital platforms can also create transparency and improve coordination.

Regular process reviews

Continuous Review and evaluation of existing workflows is important to ensure long-term efficiency. Markets, technologies and customer requirements evolve. Processes that work today might be outdated tomorrow. Businesses can use structured reviews to identify inefficient or unnecessary steps, Integrate new requirements and maximise the potential of business enhancements.

Examples of efficiency improvements

Manufacturing: Flexible production processes

A medium-sized mechanical engineering business once relied heavily on custom-made products. This meant production processes had to be set up again each time, requiring a high level of coordination.

By standardising assemblies and introducing a flexible manufacturing system, the business was able to cut setup times in half, significantly increasing its delivery capability. At the same time, the business introduced a cloud-based system that monitors inventory levels in real time and automatically triggers orders, reducing bottlenecks and overstocks.

Retail: Digital point of sale (POS) systems and CRM

A retail business with several branches struggled with a lack of centrally coordinated discount campaigns, inventory management and customer data. This resulted in duplicate work steps, incorrect inventory and underused potential for cross-selling.

Following the introduction of a digital POS system with integrated CRM, the business automated inventory management. Additionally, the business was able to customise marketing campaigns for customer segments. Transparency about customers' purchasing behaviour helped the company manage store product ranges more efficiently and reduce wasted marketing efforts.

Healthcare: Automated HR processes

In a rehabilitation clinic, duty rosters previously had to be created manually. This led to recurring coordination loops, unequal workloads and a lot of overtime.

The clinic introduced digital rostering software, which automatically factors in legal requirements, Individual requests and qualifications. This reduced planning by 70%. At the same time, the clinic established a digital training management system that automatically reminds employees of expiring certificates and suggests Individual learning paths. This was an important step toward sustainably securing professional competence.

Logistics: More efficient route planning through AI

A logistics business was struggling with high fuel costs and delivery delays.

After the introduction of AI-supported route optimisation, travel times reduced by an average of 15%, and vehicle use also significantly increased. Real-time vehicle tracking allows customers to access precise delivery times, leading to greater satisfaction and better planning.

Construction: Mobile project management

A construction business struggled to document projects efficiently and keep track of parallel construction sites.

The business began using a mobile app for digital construction site coordination. Employees can now record plans, task lists and acceptances directly on site, and they are synchronised with the central system. This has significantly reduced the number of queries and delays, while improving transparency for customers.