01.01.2019

Cost optimization - savings and efficiency

The basis for the continuity of the operation of any enterprise is to make a regular and sufficiently high and enabling profit for development. However, what happens in a situation in which we are dealing with a company whose financial result oscillates around the break-even point or the achieved revenues are disproportionate to profits? One of the most effective solutions to these problems is to increase the efficiency of the company by optimizing the costs incurred and defining the places where savings can be made. The basis for achieving these goals is, among other things, business process mapping.

Process mapping, the basis of cost optimization

Professional mapping of processes taking place in a company consists in identifying all the activities that make up the functioning of the entire company or a specific department of it, and graphically presenting them on a map in the form of a cause-and-effect diagram. Thanks to its clear and readable form, it allows you to make an in-depth analysis of the data, learn about the exact duration of specific processes, the dependencies between them, the costs incurred at each stage and the people responsible for them. The result of the above makes it possible to confront management's ideas about the functioning of processes at lower levels in the company with what they look like in reality. The creation of a process map is possible in any company, regardless of the industry and business profile - a sequence of processes can be defined in both manufacturing and service companies. Decomposing tasks into factors makes it possible to find those that are carried out inefficiently or not in accordance with current standards. Data analysis, in turn, identifies the sources of the highest revenues and the processes that generate the highest costs. Catching irregularities allows you to make informed decisions and plan a corporate strategy aimed at improving the company's bottom line. Properly functioning processes in an organization are the basis for achieving cost optimum, but they also promote the development of its competitiveness - after all, offering customers shorter (shortened thanks to optimization) delivery times than the competition will be a significant market advantage.

Saving money, increasing efficiency... but what else?

In addition to the previously mentioned advantages of creating a professional business process map, a number of other benefits of conducting such an analysis in an enterprise can also be mentioned. It makes it possible to catch even those inefficiencies that are not apparent at first glance, or can only be seen by looking at the organization from a different perspective than managers, employees and others inside the company do. For example, it may be that some of the processes should be automated, and paper forms can be replaced with simple IT systems that streamline work. In addition, the identification of best practices and the creation of well-defined standards unifies the process of performing tasks, guarantees superior and repeatable quality, and eliminates emerging inefficiencies and bad habits. Expense savings can also be found in the process of introducing new employees, which tends to be time-consuming and costly. A well-prepared map makes it possible to shorten it and solidly prepare new people for their jobs. Thanks to this, they will be thoroughly familiar with the processes included in the scope of their duties, including the way they are performed and their duration. Mapping also makes it possible to evaluate the functioning of individual organizational units and then reorganize or eliminate them in case of extreme inefficiency - all this leads to optimization of costs within the company.

Cost optimization - what for?

Cost optimization is one of the key factors for a company contributing to its growth, and the use of a business process map for this purpose also brings a number of other benefits far beyond the strictly financial dimension. It should be the starting point for companies planning expansion, introducing a new management system, new products, or simply wanting to run their business consciously and effectively. The broader perspective gained through a clear and readable map of processes makes it possible to find specific areas where savings can be made and overall cost optimization resulting in a lasting and clearly visible improvement in efficiency. Quick identification of irregularities will therefore facilitate the work not only of the employees operating the individual processes, but also of the management, which will gain a complete and detailed picture of the activities taking place within the organization.

Milena Landa

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