Cost Reduction

Pricing pressure and low margins are forcing companies to optimise business processes and reduce costs in order to remain competitive in times of the economic crisis.

Cost reduction is the key to survive

A cost reduction program should be planned by experienced consultants who can spot and advise how to improve cost-intensive processes and weaknesses in a company's purchasing management. Of course, cost reduction should never result in loss of product quality. There are two possible approaches for cost reduction solutions, either an immediate program to solve an existence-threatening crisis or a long-term cost reduction program.

Outsourcing offers significant saving potential

Outsourcing cost-intensive work or processes is common practice in the IT industry. It avoids high investments and tied-up funds and the benefits for the company include a better profit margin shown on the balance sheet, thus allowing to improve the credit rating. Outsourcing solutions also allow the company to concentrate on its core business.

Cost reduction potential process optimisation

Especially small and medium sized companies need to eliminate negative effects of the economic slowdown by consequent optimisation of work processes. In 8 from 10 cases huge saving potential can be found by simply improving the way certain processes are being dealt with. 9 of 10 clients confirm their profit per employee ratio improved and that they were able to be or remain one step ahead of the competition after a process optimisation.

Cost reduction potential purchasing management

Critical, periodic review and control of supplier contracts is often not existing in SME companies. Only 1 of 10 business owners ever though about joining a purchasing network which - by combination of purchasing powers - results in significant reduction for the company joining such a network. Futuramax advise on purchasing management solutions and negotiate international supplier contracts.