Cost reduction

It is a widely-acknowledged fact that cost reduction is one of the most challenging tasks that a company can undertake, especially when there are so many options open to cost-conscious managers. So what is the best approach? Begin at the beginning, by understanding that controlling operating costs is fundamental to improving your competitive advantage in the marketplace. In fact, to preserve or boost your profit margins in the future, you must be able to account for all the costs throughout their organisation. Sounds simple enough, doesn’t it? It’s not. Just consider the many solutions you might consider on the way to company cost-efficiency: the cost of your capital—which many managers see as a kind of "given"—can sometimes be overlooked if you are focusing your collective energy on improving their margins. You also have to consider the fact that employee costs can often account for more than 40 percent of your operating budget. Then factor in the negative effects of cyclical economic downturns and it is easy to see why many companies chose to downsize their workforce so that they can reduce expenses, remain competitive, and boost their bottom line. Or, have you considered outsourcing noncore functions to contractors or other companies? This has long been an important tool for lowering costs and enabling businesses to focus on what they do best. And such streamlining can greatly improve productivity and increase competitiveness. Finally, what about your tax burdens? Done correctly, an integrated tax reduction program can relieve the (sometimes) onerous financial burdens that can stymie a company’s development and can free up precious capital that can be redirected to the firm’s long-term benefit.

If this is your situation:

• You need to know precisely how and where your costs are distributed throughout your company?
• You want to know where to focus your cost reduction efforts for maximum advantage?
• Your company is already feeling the affects of an increase in older workers and you must find a way to reduce your benefits costs.
• You are thinking of downsizing, but you know that workforce reductions don’t always yield the promised profits; that such expenses cuts are followed by revenue loss. You need reliable advice on how to proceed.
• You would like to reduce the costs associated with all of your employment costs.
• You would like to outsource some of your operations but need help sourcing countries and managing the social, ethical and environmental risks that your plans will inevitably raise.
• You require help to manage your cash flows, increase your gross tax margins and net profits, and reduce your overall tax rates.
• You need assistance in identifying all the hidden costs in your company.
• You must detect all the weaknesses in your financial controls systems and design improvements that will reduce your operating costs.