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purchasing and payables functions can lead a thorough review and implementation of out of the organization can yield significant
to dramatic cost savings, staff savings, and new solutions of the 130 expense categories opportunities. Top that process off with a
space/equipment savings as well, reducing can throw off up to 25 percent of that spend financial reward to the employees, and you
the need for multiple FTE’s in many cases. number. Will all categories generate big will have a way to improve morale, drive
savings? Hopefully not, but there will be employee engagement, and reduce costs
Outsourcing of Non-Core enough savings opportunities to average as well. Your suppliers and consultants
Responsibilities – There are experts 25 percent for most groups if you approach know your business well, so tap into them
with years of functional experience that this correctly. before year-end, and ask them for their
can probably perform some jobs more suggestions on how to drive costs out, and
efficiently and most cost-effectively than Employees like to buy and interact with bring new profits into the business.
your own staff can at some levels. Human suppliers for some obvious reasons.
resources, information technology, Executive management needs to insist on Expense Management is a Discipline, a
marketing, procurement, compliance optimizing (reducing) the supplier base Function, Not a Project
management, and selected consultants can to maximize leverage, reduce pricing, Look at Fortune 500/Fortune 1000
bring significant value at a fraction of the costs, and inefficiency. Pushback from organizations that have staying power and
cost. If you excel in marketing, sales, service, internal employees against these changes operate at high levels of efficiency. These
and customer support, it might make sense are often simply a reluctance to change and organizations don’t approach expense
to focus on those areas, and leverage the unwillingness to give up tasks they enjoy… management only when times are bad or
expertise of outside professionals to help and sometimes benefit from. when economic times are challenging.
you achieve best-in-class status in other They don’t view expense management as a
functional areas. Improved Operational Performance– short-term project, but rather they organize
These operational improvements can around and build competencies to manage
Comprehensive Cost Reductions – five come from many areas of a business costs and expenses routinely.
percent of total revenues are spent on and is often driven by the employees
services and supplies. Research says (and themselves. A simple process of soliciting Large organizations tend to centralize to
has been borne out by our practice) that new ideas from employees to drive waste Continued on next page

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