Cost Reduction

Internalising Cost Reduction

Cost Reduction commands the highest focus in the current time. Corporations are struggling to hold on to profits given the unpredictability of revenue and cash flows. In good times, most organisations do not pay real attention to the management of costs other than for materials that need to be procured. In the present conditions, companies need to look at all avenues of saving and look to driving efficiencies across all levels and cut out all unnecessary frills. 

It is important to appreciate and apply scientific rigour to the cost reduction process and not make indiscriminate cuts that might have a negative impact on the business in the short and the long term. In many cases there are hidden or associated costs that become apparent only when changes in processes, systems, policies, or people are made without proper planning and foresight. The impact of a delta in any of the four pillars that a business stands on is sometimes disproportionate to the apparent saving in cost, which is why the process needs to be managed with deliberation and due consideration.

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Daksada’s Approach to Delivering Cost Reduction

Daksada has experience in delivering and embedding Lean Management in spirit and practice across the organisation just the way the Japanese have applied over several decades across organisation size and industry types. We have over 30 man-years of experience in looking at people related policies and processes, recruitment, and development that invite cost saving into the thinking, planning, and performance of employees. We go beyond the obvious focus of most businesses – the direct costs including head count. In our experience, far too many organizations look at human capital with an accounting mindset, and consider the savings in wages from reduced headcount as a saving to the bottom line. All too often, this does not pan out as intended, with businesses seeing an erosion of capability that ultimately results in reduced performance, customer dissatisfaction and finally in greater losses. Our approach instead is to consider ‘hidden’ or not so obvious areas where waste is found, or unrealised savings and improvements abound. Our focus on processes effectively frees up resource, eliminates waste and drives growth and efficiency resulting in an upward spiral for the business. Given that such ideas need to be constantly reinforced and success recognized to encourage others, we also round off this offering with a strength in helping communications reach across organisations. 

Our approach to serving clients starts with an understanding of the ‘as is’ processes, architecture, and resource levels. Our experience and expertise allows us to identify opportunities for improvement, savings, efficiencies, waste elimination, all of which ultimately enable the business to benefit significantly both in terms of reduced costs as well as enhanced output, thus positively impacting business results.

Daksada’s Approach to Delivering Cost Reduction

Given our expertise and experience in crafting and managing solutions that take into consideration people, processes, systems, and policies, we have been able to deliver strategic cost reduction interventions that carefully balance all four aspects. This is especially critical in high-pressure environments like the pandemic when revenues are under severe pressure and costs are flat, thereby delivering strain on profits. Through well planned cost reduction mechanisms and interventions like LEAN Management, we are able to strengthen organisations to weather tough situations and be able to recover faster when they are over. Clearly, Cost Reduction increases the tensile strength of a business and ensures that it is able to maintain profitability by managing costs without much impact on the operations or staff strength. More a question of right sizing than ripping off what seems to be peripheral and unnecessary. 

Our Partnership Perspective To Cost Reduction

It is obvious that an organisation will need to invest in the immediate term to deliver reduced cost operations in that continue to arrogate benefits over the long term. We are happy to stake a part of the project compensation on the savings achieved over the term of the process. This is an open offer mindful of the fact that such interventions often need 6-12 months from problem identification to arriving at measurable success factors. We believe that the Client or Customers success is truly ours given the spirit of partnership that is central to the way we work. We are perhaps among the very few who are open to indexing a part of our compensation to the success metrics that measure the impact of the business transformation process.