The 7th topic in my series of “Ask the experts – why companies to go through transformation”, focuses on cost reduction.
Cost reduction enables companies to release funds which they can re-invest to achieve growth in other areas. This is often seen by outsiders as a means of making people redundant, and in some cases it is, but often it is about eliminating costly processes to release funds which can then be used to hire more people, or redeployment of existing staff into more productive roles.
In the public sector, there has been relentless pressure from the Government to reduce cost and achieve more value for the tax payer. Most public sector organisations have made redundancies and process improvements over the last few years and are under pressure to make more major savings over the next three years. The only way to make big savings is to introduce new methodologies to deliver services. The operating model has to change, and this often means tearing up the existing operating model and starting again. There will be very big chunky changes, including mergers, shared services and integration to eliminate wasteful processes.
Next topic in the series (coming soon) :Process Improvement