Making Money from the Inside Out
Making Money from the Inside Out.
It is a well-understood axiom of the business world that there are two ways to enhance rock bottom line of the business. Stated simply, those two ways are to form money or to chop costs.
Now no business can cost cut their thanks to profitability. But by an equivalent token, waste and excessive internal costs for any business can eat away any profits that business is enjoying. So to urge ahead during a competitive business environment, both methods must be used .
When a business turns its eye to cut , there’s a stated or unstated business objective that the business owners will discover significant bleeding of revenues that are happening within the systems of doing business.
So if those systems are often improved to eliminate that waste, the business would literally make money from the within out because the overhead of the business would drop so dramatically.
The usual progress of such a price saving campaign by a business is to seek out “the low hanging fruit” first. By that we mean that so as to satisfy the stress of management, middle management will identify superficial savings in hopes of satisfying the need . Hence switching from disposable cups to mugs or curtailing on break room amenities often continue the block first.
Sadly, while there could also be some superficial savings to be found in such places, the many introduction of efficiencies for any business lie at a deeper level and take a more in-depth process of locating problems with how things get done internally.
The methodology of finding these “money pits” within a business is usually called “Process Improvement.” The concept of process improvement is to diagram a specific business process from inception to completion and document the stages it goes through, the delivering of authority for the method and to pin point places where inefficient methods are causing excessive cost in executing that process on the way to the ultimate stage of process completion.
Routinely, the areas of business structure that the majority often identified as being candidates for a process improvement examination are…
Excessive overhead between departments
Departments within a business are notorious for taking over the atmosphere of a fiefdom and becoming resistant if not suspicious of other departments within the same company.
When that happens, department managers will introduce paperwork and unnecessary processing to cause “work” to maneuver to his or her department from another or for completed jobs to continue along their path.
This excessive overhead are often costly at the department level and hamper the business as a unit enough to truly reduce the profitability of the organization.
A business process moves through the organization as each department or entity adds value to the method through to the completion of the work . However if communications between departments or people along the method chain are flawed, a process can grind to a halt and await hours if not days before the missed communication is discovered and therefore the work is put into the cycle to be completed.
This hamper or break down in communications are often an incredible drain on the corporate. To correct the matter, modern tools of communication should be reviewed so each significant person along the chain is quickly made conscious of work that must be done and may signal to subsequent agent that their step is complete which the method is moving to subsequent stage.
An inefficient IT infrastructure
Out of date computer virus s that aren’t integrated with one another cause needless work to be done to require data from one system and moving it into subsequent computer program only to be entered again at subsequent stop along the chain. Standardization and integration of knowledge and systems will introduce huge efficiencies to the method .
By streamlining the method of moving a business requirement from inception to conclusion, we will remove much of the inefficiency and waste that has become inherent thereto process.
We will introduce up so far integration designs both at the IT and process level to quickly move the method from one department to subsequent upon completion. the result may be a streamlined organization that’s not “bleeding money” thanks to inefficiencies and intrinsically is making money “from the within out”.
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