From Surviving to Thriving: The Cost-Saving Strategy Most Companies Overlook

When tough times hit, companies often resort to cost-cutting measures. While this may seem like a logical approach, it can have negative consequences like reduced revenue, demotivated employees, and increased stress on managers.

Instead of blindly slashing budgets and laying off employees, businesses should consider a more strategic approach. By making upfront investments to identify areas for savings and improvements in output, companies can navigate economic downturns more effectively and emerge stronger.

It is time for us to start learning from our past mistakes

Researchers analysed data from three global recessions—the 1980s, 1990s, and 2000s—and observed a trend among the 4,700 companies in their study. They found that a significant 17% of the companies didn’t survive the economic downturns. Even the surviving companies struggled to reach pre-recession levels, with minimal margins, even three years later.

of companies did not survive the previous economic downturn
0 %

While these statistics aren’t cause for celebration, the study does offer a glimmer of hope. Nine percent of the companies in the study not only survived but thrived, surpassing their competitors by at least 10% in the three years following a downturn.

So, what set these companies apart? Did they:

A) Gain an advantage by cutting costs more aggressively and swiftly?
B) Opt for larger investments to maintain their competitive edge?
C) Build on their existing growth momentum?

Surprisingly, the answer is none of the above. The group that aggressively cut costs had the lowest chance of emerging stronger, at just 21%. Meanwhile, the group making larger investments fared slightly better, with a probability of 26%.

of growth leaders couldn’t keep up with their previous pace and toppled during the slowdowns
0 %
The group with the highest probability, at 37%, adopted a strategy of selectively reducing costs while increasing spending, with a focus on operational efficiency. They understood the importance of making necessary investments for growth while also recognizing the need to cut costs for survival.
How to shape a strategy for operational efficiency

The study highlights the importance of choosing the right strategy, but the challenge lies in how to develop and implement it.

Operational efficiency, as defined by Forbes, involves consistently delivering high-quality products and services while fostering leadership, empowering employees, and having a clear vision of business outcomes.

In shaping a strategy for operational efficiency, the focus is on reducing waste, enhancing productivity, and delivering better or more cost-effective products and services to customers. This essentially involves improving business processes.

However, many companies are stuck in the early stages of process maturity and struggle to understand their processes. Without transparency in processes, it’s difficult to make informed decisions to improve operational efficiency.

Benchmark and prioritize

According to Gartner, while 94% of CIOs believe they understand how technology affects corporate finances, only 62% of CFOs agree.

As economic conditions begin to slow down, bridging this gap becomes crucial for survival and subsequent growth. Following a thorough discussion, it’s time to take action. Gartner recommends the following three initial steps:

1

Benchmark your current spending so you can prepare for strategic resource decisions

2

Surface cost inefficiencies and identify and pursue strategic cost optimisation opportunities using digital

3

Start prioritising your digital bets by focusing on those with the largest impact on high value business outcomes

Combining these three suggestions with an understanding of operational efficiency requirements should naturally lead you to embrace process mining.

Understanding your business processes

Investing in digital initiatives like process mining, at a reasonable cost, can help mitigate the negative effects of economic pressures in the short term and establish a long-term competitive advantage.

Process mining provides a comprehensive view of your business processes by extracting data from systems like ERP and CRM. It offers an unbiased visualisation, uncovering inefficiencies and identifying areas for improvement.

Our process mining solution, QPR ProcessAnalyzer, not only reveals inefficiencies but also calculates the value potential of improvement actions. It serves as a solid foundation for your operational efficiency strategy, enabling you to measure and monitor success.

During an economic downturn, investing in process mining allows you to identify necessary changes before blindly following cash flows. This approach can boost employee morale by presenting data-backed solutions beyond layoffs.

Importantly, the savings identified through process mining target waste and inefficiencies that should be addressed and monitored regardless of economic trends.

For more information

Leave your details and our team will contact you:

Copyright RQTech.  All rights reserved.  Click here to view our privacy and data policy.

Get a quick overview so you can spend your time improving your processes.

You can easily define and set up processes according to your own needs using a convenient layout tool. In addition, since all types of workflow processes can be managed, you get all case management in one single system. 

Analyses, statistics and reports give you an unbeatable overview with real-time status and division of responsibility. Nothing has to fall through the cracks anymore and you always have an accurate and up-to-date base for decision-making.

CANEA Process is a tool that allows you to model and share business processes in an easy-to-use graphical web interface.

Seeing is understanding

Visualisation gives all employees an understanding of the organisation’s processes, activities, responsibilities and information flows.

Living processes

Identifying working methods while making it easy to update is the basis for continuous improvement of processes.

Create a complete picture

Linking together documents, information and tools with clickable process maps create an intuitive and comprehensive management system.

CANEA Workflow is an IT solution that automates, quality-assures and speeds up administrative workflow processes.

You can easily define and set up processes according to your own needs using a convenient layout tool. In addition, since all types of workflow processes can be managed, you get all case management in one single system. 

Analyses, statistics and reports give you an unbeatable overview with real-time status and division of responsibility. Nothing has to fall through the cracks anymore and you always have an accurate and up-to-date base for decision-making.

By creating executable processes in CANEA Workflow, you get both better control of the situation and smoother processing.

Streamlining the work

Ensure compliance and that handovers are done correctly and with the right information.

Correct decision support

You get an unbeatable overview of the processes in real time, with both clear reports and clear diagrams.

Improve processes continuously

Our process support can be constantly adapted to changing needs and requirements. In this way, we give you the best possible conditions for your daily work.

A document management system without complicated folder structures.

CANEA Document combines simple and intuitive search features with powerful features for managing documents from a life cycle perspective.

Maximum availability
Search and find information quickly based on what you need, not where it is stored.

High security
Ensure accuracy, changes and access to all information – with high traceability.

Fulfils requirements
Manage information according to standards, legislation and other requirements for document management.

CANEA Document supports everything from production, publication and modification to archiving and deletion – with full traceability and version management.

CANEA Document provides secure management of all types of documents – in one place. Tagging the information with metadata creates a virtual, multidimensional folder structure. This means that a document appears in multiple locations at the same time, with authorisation-controlled access. The right information in the right place for the right users at the right time!

You can usefully add your company’s process-oriented management system to CANEA Document. All production and distribution of documents is quality-assured and streamlined. In addition, your employees always have access to the most up-to-date version of the documents – directly via intranet, tablets and mobile phones.

Improve the performance of your project activities

CANEA Project is a comprehensive project tool with integrated support for all types of projects and parties– such as management, resource owners, clients, project managers and project participants. CANEA Project gives you an excellent overview of your entire project portfolio, including profitability and status, making it easier to prioritize and make decisions.

CANEA Project shares all important project information with both internal and external members.

Let your project manager focus on management rather than administration and distribution of the information.

Gather all project information in one place and make it available to both internal and external members.

Helps you with prioritization of projects, resource management and analysis of portfolios and programs.

Make reality of the strategy

CANEA Strategy makes it possible for organisations of all sizes to create a unique common thread from the strategic work to the daily operations. We do not just provide performance management tools but rather a completely new generation of IT support for strategy activation. The system guarantees and provides support throughout the chain from strategy to execution. You get no results without action. CANEA Strategy makes it possible in practise! 

CANEA Strategy ensures and provides support throughout the entire journey from strategy to execution.

Create a shared understanding of the strategy, the goal to achieve and how.

Gives management an unbeatable overview of what’s happening, how it’s progressing, and why.

Creates a clear common thread from the strategy to project, initiatives and actions.