Making Money From The Inside Out

Making Money from the​ Inside Out
It is​ a​ well-understood axiom of​ the​ business world that there are two ways to​ improve the​ bottom line of​ the​ business .​
Stated simply,​ those two ways are to​ make money or​ to​ cut costs .​
Now no business can cost cut their way to​ profitability .​
But by the​ same token,​ waste and excessive internal costs for any business can eat away any profits that business is​ enjoying .​
So to​ get ahead in​ a​ competitive business environment,​ both methods must be employed.
When a​ business turns its eye to​ cost cutting,​ there is​ a​ stated or​ unstated business objective that the​ business owners will discover significant bleeding of​ revenues that are going on​ within the​ systems of​ doing business .​
So if​ those systems can be improved to​ eliminate that waste,​ the​ business would literally make money from the​ inside out because the​ overhead of​ the​ business would drop so dramatically.
The usual progress of​ such a​ cost saving campaign by a​ business is​ to​ find the​ low hanging fruit first .​
By that we​ mean that in​ order to​ satisfy the​ demands of​ management,​ middle management will identify superficial savings in​ hopes of​ satisfying the​ requirement .​
Hence switching from disposable cups to​ mugs or​ cutting back on​ break room amenities often go on​ the​ chopping block first.
Sadly,​ while there may be some superficial savings to​ be found in​ such places,​ the​ significant introduction of​ efficiencies for any business lie at​ a​ deeper level and take a​ more in-depth process of​ locating problems with how things get done internally .​
the​ methodology of​ finding these money pits within a​ business is​ often called Process Improvement .​
the​ concept of​ process improvement is​ to​ diagram a​ particular business process from inception to​ completion and document the​ stages it​ goes through,​ the​ handing over of​ authority for the​ process and to​ pin point places where inefficient methods are causing excessive cost in​ executing that process en route to​ the​ final stage of​ process completion.
Routinely,​ the​ areas of​ business structure that most often identified as​ being candidates for a​ process improvement examination are…
* Excessive overhead between departments .​
Departments within a​ business are notorious for taking on​ the​ atmosphere of​ a​ fiefdom and becoming resistant if​ not suspicious of​ other departments in​ the​ same company .​
When that happens,​ department managers will introduce paperwork and unnecessary processing to​ cause work to​ move to​ his or​ her department from another or​ for completed jobs to​ continue along their path .​
This excessive overhead can be costly at​ the​ department level and bog down the​ business as​ a​ unit enough to​ actually reduce the​ profitability of​ the​ organization.
* Communication problems .​
a​ business process moves through the​ organization as​ each department or​ entity adds value to​ the​ process through to​ the​ completion of​ the​ job .​
However if​ communications between departments or​ people along the​ process chain are flawed,​ a​ process can grind to​ a​ halt and wait for hours if​ not days before the​ missed communication is​ discovered and the​ work is​ put into the​ cycle to​ be completed .​
This slow down or​ break down in​ communications can be a​ tremendous drain on​ the​ company .​
To correct the​ problem,​ modern tools of​ communication should be reviewed so each significant person along the​ chain is​ quickly made aware of​ work that needs to​ be done and can signal to​ the​ next agent that their step is​ complete and that the​ process is​ moving to​ the​ next stage .​

* An inefficient IT infrastructure .​
Out of​ date computer programs that are not integrated with each other cause needless work to​ be done to​ take data from one system and moving it​ into the​ next computer program only to​ be entered again at​ the​ next stop along the​ chain .​
Standardization and integration of​ data and systems will introduce huge efficiencies to​ the​ process.
By streamlining the​ process of​ moving a​ business requirement from inception to​ conclusion,​ we​ can remove much of​ the​ inefficiency and waste that has become inherent to​ that process .​
we​ can introduce up to​ date integration designs both at​ the​ IT and process level to​ quickly move the​ process from one department to​ the​ next upon completion .​
the​ outcome is​ a​ streamlined organization that is​ no longer bleeding money due to​ inefficiencies and as​ such is​ making money from the​ inside out.

You Might Also Like:

Powered by Blogger.