More on Cost Cutting…

Mike Arenth at Ariba, Inc wrote on 13 January

Faced with tightening finances, deflation and increased supply chain risk, business ranging from industrial manufacturing to high technology must find ways to ensure their financial health and, ultimately, their survival.

As the global financial crisis continues, executives are being asked what their bailout strategy is.  And for an increasing number, the answer is spend management – the discipline of controlling and optimizing the yield of every penny that you spend. 

Our thoughts…

Obviously, it makes sense to find ways to ensure your company’s financial health and, ultimately, its survival. 

The answer is ‘spend management’?  Isn’t that just fancy marketing jargon for cost cutting?

He does mention an interesting cost containment idea – Purchase contract management software to ensure that agreements [contracts] are negotiated and finalized according to company policy and then implemented and complied with quickly.

We see this as the Quote-to-Order process.  This is a very key process for most companies and we don’t know of any company using software to manage this process.  Some reasons manage contracts include:  negotiated agreement is recorded; the price quoted has been approved and you will make a profit on the deal; the details of the order have been approved; the order is entered; the customer has been involved in the process; etc.

I have said this before and it is still true…

No matter how bad the economy may seem now, there is light at the end of the tunnel – recessions and economic slowdowns do not last forever.  Good times will return.  Be prepared to hit the ground running when they do by taking action now.

The real question is – Are you prepared to hit the ground running?

Your Thoughts…