Atos Consulting has offered its top 10 tips to businesses on how they can improve business performance this year without jeopardising long-term objectives.
Paula Sussex, CEO of Atos Consulting, said, "The real challenge business leaders, financial directors and IT directors face is balancing the short-term needs of the business with the longer-term strategies already in progress.
"Short-term measures where cost reduction is concerned can be risky to key elements of business success such as staff retention, new product innovation and ultimately customer service."
To help survive the current climate and prepare for the upturn, Sussex's tips for businesses are:
- Contact long-term suppliers and seek their input into the cost reduction process. Together you can drive forward the joint cost reduction projects on the basis of reduced revenue but increased profitability.
- Avoid the traps. A 2007 survey of 180 senior procurement managers by Atos Consulting concluded that over half felt that the constant focus on in-year savings limited their ability to implement more advanced sourcing strategies. In some plan cases the impact of this was to deliver 3%-5% savings in one year at the expense of 8%-12% in the next.
- Engage more closely with your workforce to prepare not only for the current downturn but also for the subsequent upturn. To do this, your workforce needs to be flexible and scalable.
- Do not stop investing in existing staff. Re-skill your existing workforce, focusing on value for money in the back office and retaining your customers in the front office roles.
- Increase scrutiny around operational spending and costs - any cost reduction needs to be aligned to business strategy rather than by putting a blanket percentage cut across the organisation.
- The workforce morale implications of a downturn are more difficult to predict - it is important to be a good leader, particularly when sailing in uncharted economic waters.
- It is important that businesses do not lose sight of staying on the growth trail. When the future is uncertain, it can be tempting to just "batten down the hatches" and try to "ride out the storm".
- Do not cut back on business development or product development budgets - keep your products or services current and creative. Too often, companies cut back on the new products or services that represent the future of their business. Then once the upturn arrives they find they cannot catch up with the market's expectations and demands.
- Ensure that you are providing your customers with the highest level of customer service to protect prices and present new reasons for customers to remain loyal.
- Do not plan for the short term - plan for the inevitable upturn. Exploit rather than shelter from the downturn and decide whether your enterprise will bask or bake in the face of economic climate change.