Why Cost-Cutting Doesn’t Have To Affect Business Operations.
December 18th, 2023
SUMMARY / KEY TAKEAWAYS
- We tend to think of business cost cutting as an unfortunate procedure, with its most symbolic expressions defined by layoffs, store closures, and even selling off assets.
- Yet that’s hardly the full picture of what cost cutting is and all it entails.
- Cost cutting can be quite a yawn-inducing exercise if tracked to every degree because it can show up in almost all business decisions.
We tend to think of business cost cutting as an unfortunate procedure, with its most symbolic expressions defined by layoffs, store closures, and even selling off assets. Yet that’s hardly the full picture of what cost cutting is and all it entails.
Cost cutting can be quite a yawn-inducing exercise if tracked to every degree because it can show up in almost all business decisions. It can be as mundane as negotiating a new supply contract with a procurement center, or it may be as frustrating as an employee reverting to a free staff coffee policy.
The shrewdest leaders often see cost-cutting as a means of optimization, as opposed to quick and harsh cuts. But how can that be achieved without affecting operations? If you want a process to become less capable, you deprive it of funding, so the thinking goes.
But even in advanced fields, cost cutting isn’t always the same as delaying or distracting operability. In this post, we’ll give a few examples as to why that is:
You would be surprised just how much outfitting an office, a warehouse, or even a clinic can be achieved through used or reclaimed equipment. For example, used CT scanners, well-maintained industrial equipment, office furniture, and IT equipment, all of this can be curated and sourced from auctions or secondary sellers, allowing you to outfit new business departments in the best way.
Equipment renewal allows you to get value for money while also providing the entire functionality set of whatever product is being used, and the regular servicing charges are a pittance compared to the saved costs.
When you aim to renew contracts with suppliers, it’s good to request any discounts or loyalty bonuses you may be entitled to. It’s in a supplier’s interest to keep you as a client, and if you signal that this is not necessarily guaranteed or you’re looking for a more competitive deal, you may be able to ask for it. In addition, shopping around may help you identify better deals, and letting your current supplier know that can help them bend to meet a similar price.
It’s not just loyalty that counts. More and more companies are moving to a fully modular means of delivering service packages. So an IT company might offer you hosting possibilities, a cybersecurity package, and even outfit you with IT if needed, but you may not require advanced measures like web hosting and newsletters, as you do that in-house already. Using services that allow you to avoid wasting money on pricier packages with unused tier features can be a good use of time, because why should your firm be enrolled in products it doesn’t use?
Outsourcing is a rare business win-win in that yes, while it costs the price of a professional, you can still hire them per-task and ensure a quality standard. This means you no longer have to open a position internally, be that for copywriting on a website and filling it out, or undergoing a fair hiring practices audit.
With this advice, you’ll begin to cost cut with the best of them.
Please cite as:
Ontology of Value (December 18th, 2023). Why Cost-Cutting Doesn’t Have To Affect Business Operations. Retrieved from: https://ontologyofvalue.com/why-cost-cutting-doesnt-have-to-affect-business-operations/
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