Monthly Archives: June 2010

When we reduce budgets and cut costs are we doing it rationally?

I sense that many cuts are being made arbitrarily rather than in a well thought-out and planned manner. Most businesses and public sector areas carry some level of inefficiency. But to cut just for the sake of cutting is folly. No one likes reduced services. Cutting a fixed percentage of all budgets means services have to be reduced even if it’s not appropriate. Yet this is what we expect.
To use a cliché we should see our current economic situation as an opportunity. If we redesign our business operations by looking at the processes now we can reduce our cost base whilst maintaining or even improving our level of service. The added benefit is that when economic growth increases and demand for services rises the savings generated will multiply.