The days are gone where developing a cost reduction strategy was as simple as cutting down the budget. Furthermore even randomly trimming expenditures across the board is not accepted nowadays. Therefore today we need to identify long-term saving opportunities and achieve sustained cost reduction.
Documenting and analysing business processes can achieve sustained cost reduction. Create an end-to-end current-state business process for each process in the organisation. Subsequently, dig into the lower level views to identify the associated process expenses.
Once the documentation is complete, analysing and improving the processes achieves sustainable cost reduction.
Use the following analysis techniques to successfully achieve cost reduction.
Process Value Analysis
Process Value Analysis is a method to analyse the value of each of the tasks. That is, first of all understand if the task contributes value directly to the customer. Secondly, analyse if the task adds value to the business. Finally, analyse to identify the processes that do not add value at all.
Process Time Analysis
Process Time Analysis is a method to analyse if time is well spent. Time analysis measures two components. Firs of all, the total execution time of the process, and secondly the delay time in the process.
Process Cost Analysis
Process Cost Analysis is a method that measures process cost. It identifies the total cost of doing the process. Secondly, it identifies the cost of any delays in the process.
Process Efficiency Analysis
Process Efficiency Analysis measures if a process is operating in an efficient manner. An industry efficiency threshold determines which processes are efficient and which are not.
“I specifically found the PRIME© (PRocess In a Managed Environment) methodology highly practical,
logical and results driven. It is a methodology that can be applied immediately after learning.”
Head of Business Process Services at BOQ