Electronic Cash News

With talks of recession corporations naturally focus more on cost-cutting opportunities. Many companies will just make across-the-board cuts in General and Administrative (G&A) costs, but the big opportunities are in looking at corporate business processes. This is especially true in the areas of supply chain and technology. Reducing costs through use of best practices, standardization, elimination, or simplification offers companies more opportunities than blanket cost cuts. Having a lean G&A is good, but having superior, cost-effective business processes are better.

In reading The Hackett Group’s research article, G&A Spending Cuts Offset 21%-41% of the Anticipated Decline in Pre-Tax Profit During Recession, they talk about global corporations that “lift and shift” business processes to reduce costs. In their examples, they basically talked about outsourcing organizations overseas such as call centers or consolidating data centers. These are good example of optimizing business processes versus just taking an organization approach of dictating across-the-board cost cuts.

I continue to see automation technology as the best enabler for reducing costs in corporations that focus on continue process improvements. For corporations focused more on organizational structure than processes, technology just becomes another cost center.

Also, see Sourcing Innovation’s posting, Hackett Hacks Away at Recession Declines.