Given the economic environment, where can I cut costs without impacting business performance?

Anyone wishing to cut cost and increase service levels should consider using an outside managed services provider. In most cases resourcing can save a company a minimum of 30% to 40% vs doing it in house.

Here is a quick snap shot ROI. Company has 25 servers 100 desktop 2 routers 10 printers. Estimated cost to monitor and manage this is in excess of $200k. Figure on an System administrator and an assistant salary & benefits, tools & infrastructure. This can easily be resourced for about $125K. A savings of $75K which can be resourced to other areas of the organization, while increasing your service levels.

If this sounds interesting to you please contact me directly at orlandop@tulip.net or cell 914-552-3732 and I will put you in touch with one of my business partner who can provide you with some additional information and guidance.

Best of luck,
Orlando Perez

Now is an ideal time to review your telecommunications expenses. Voice, Data, Video and Cellular service bills are usually a substantial part of your expense budget. It is not uncommon to find 15-20% reductions in ongoing costs. (You can save, even more, if you are willing to change carriers or service types.)

Studies show that over 90% of all telecommunications bills contain errors. Most are overcharges (no surprise). If your company has been over billed, the phone companies are required by law to a refund your money back as far as two years (sometimes even further.) Identifying errors and securing those refunds isn't easy but can amount to ten's of thousands of dollars that could be added to your bottom line.

If you don't have telecom auditing expertise in house, you can outsource the work to a company who specializes in that field. Most telecom auditing firms work on a contingency basis. So, there is no fee unless they save your company money. (type "Telecom Bill Audit" in your favorite browser for a list of companies and the services they provide)

As an independent telecom auditor, I work with a variety of telecom expense management companies across the country. I will be glad to help you find one that is right for you. Feel free to call me at 925-487-5666.

I would recommend taking a look at using activity based costing methodology. This can help you find where your costs are and then you can implement a plan to begin reducing costs. Robert Kaplan is the guru on this. Is there any benchmarking of costs versus your competitors? This is a good way to see where you may be lagging. Also, be careful of cutting costs versus investing for the future. If money being spent now is being used to develop new products, procedures, etc. I wouldn't cut them unless it is vital to keep the business going. A contrarion approach may be better if you can afford it. While you competitors are cutting back on costs, say advertising, you may to increase expenditures and try and go for market share.

This is complex question and the answers depend somewhat on your business. If you are looking for a comprehensive solution, then I'd agree with Jim Arnold that you look at activity-based costing or other methodologies that get at the utility of various expenses.

Here's a much more narrow suggestion:

One easy target may be your office space. During good times, there is a tendency to grow one's office space. But during down times, there is often a reluctance to shrink the space, even if there is excess capacity due to layoffs. In my experience, most landlords are willing to work with their tenants. The nice thing about reducing office space is that it has other costs associated with it, such as utilities and insurance, that also are lowered.

If the space you have is already the right size, or your business depends on its current space (e.g. manufacturing, retail), then it never hurts to see what the landlord might be willing to do. Often, negotiating a longer term lease may make them amenable to cutting the cost per square foot.

Good luck.