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Mostly organizations do not care for multitasking concept, people who can handle manage control many managerial activities, how effective. they can play pivotal role in improvements of organizational activities ultimately lead to profitability for unlimited time. Every organization struggle and faces critical targets like how to retain in market ; with cost reduction, efficiency improvements, marketing development. all these are the results of managing smooth system within organization
The Credit Crunch is affecting every day life for some time now. Within organizations budgets have been frozen and liquidity is a big problem at the moment. Almost all organizations have cost reduction programs in place to control their spending.
In most cases cost reduction programs focus on the organizations’ staff which contributes to the destruction of knowledge capital. Instead of destroying human capital, strategic cost reduction in Facilities Management and Corporate Real Estate could potentially save millions of dollars overnight.
Accountability is the key concept for cost reductions. You have to ensure that you can compare figures and that people are accountable for those figures. Therefore you have to identify cost reductions possibilities and start eliminating these costs now!
Although not all cost reduction methods have the same savings potential, they can help your organization to cut costs dramatically.
Below is a list of10 ways to save costs:
The entire CRE portfolio is either owned or leased. Particularly in Lease Administration there is a clear distinction between performing and non-performing lease contracts. The costs per square foot (office space) are a good indication for your performance. Ensure that you make quality decisions on what standard cost per square foot you want to achieve for your portfolio.
Research has indicated that at any given moment a staggering40% of your spaces are unused. This is unacceptable and has an immense cost savings potential. Identify which space is actually used and which is not. Good indications are the ratio between Usable Space and Not Usable Space, Office Space and Shared Space + Commons.
When you want to start saving on your space costs ensure to implement a space chargeback methodology instantly. When budget owners are accountable for their space usage you’ll reduce your space occupancy costs overnight. This also helps to eliminate underutilized space (point3)
Some of your assets are mission critical. Think about your HVAC installations. Without these it is not possible to work in an office building. However some of those installations are underperforming while their costs are immense. What you need to know is which technical service requests are related directly to an asset. In addition to know about the technical and economical lifecycle. Perhaps your critical installation is performing according to organization standards and needs to be replaced.
All knowledge workers need to meet occasionally to discuss about their projects, have team meetings, develop strategies, etc. Although meetings are becoming more virtual a large portion of the meetings are still physical meetings. No-show is extremely expensive and about25% of all planned meetings are no-shows. This blocks the limited meeting room capacity for other meetings forcing to hire additional meeting capacity or even worse to convert office space to meeting space. To cut costs instantly implement a no-show charge when cancelled too late. This has both a positive impact on your space usage as well as your conference room occupancy percentage.
Especially in the maintenance of your critical assets you need trustworthy suppliers. To reduce costs you need to be able to measure the number of technical service requests to the contract and SLA. If the supplier doesn’t meet the contract, cancel the contract. Again accountability is key here. You need to know which assets cause interruptions to your primary process and need to identify which causes these interruptions.
Over the last five years virtual meeting technology has leaped forward. WebEx, GoToMeeting, Saba, Microsoft, and other vendors provide excellent meeting technologies that can reduce the number of flights dramatically.
Energy is expensive and will become even more so in the next couple of years. LEED and BREEAM are examples of standard evaluation methodologies which can help you to identify your most expensive energy consuming buildings. In addition to reducing costs you improve your organizations carbon footprint.
In each organization there are a number of processes which do not contribute to the organizations business goals. These inefficient processes need to be eliminated from your organization today as they have a large cost impact. As an advice you can use the20/80 rule. Identify your thirty most used requests then you will have about eighty percent of the processes. If you evaluate these processes your able to eliminate the non efficient processes.
In addition to the above you might have some ideas of your own. What cost reduction ways have you implemented? And are they succesful. I’d love to hear your experiences
