What gritical thinking is, how to save costs in the long term instead of hasty cuts

Gritical thinking is a play on words that you willcome across in our campaign to promote effective and meaningful cost reduction. The period of high inflation forces many companies into situations where they cannot continue without cost reduction. It is natural that drastic cuts are the first solution that comes to mind for management. As digitization consultants, we also want to show companies ways to save money in the long term, investsmartly in technology and continue to grow - in short, to think critically.

Cuts as last resort

Drastic cuts can be effective in the short term and sometimes even necessary - especially when a company finds itself in a situation where if it does not rapidly reduce costs within a few weeks, it will not have money left for wages and goods. In such a case, they are an effective last resort.

But when the company still has a choice, instead of cutting, it should look for ways to save in the long term and support its future growth. Hasty cuts can damage the company, limit its development and potentially deepen the economic crisis in the market.

Review existing processes and look for opportunities

When looking for ways to cut costs, the first thing to do is review your existing processes. Go through all the regular activities in the company and pay particular attention to those that take up the most time. Typically, these are: 

• processing orders, 
• document processing,
• warehouse processesor
• customer service.
 

For each activity, look for ways to do it faster together with the employees. Also find out what you need for that. 

For example, if your invoicers circulate among managers for signatures when approving invoices, you will find that this activity can be automated. There is an approval tool that solves the whole process electronically. After a short analysis, you can find out that the tool will save you dozens of hours of work and will also improve cashflow thanks to faster invoice approval.

There are tons of ways to save meaningfully

There is no universal solution that will enable every company to save. It's always a matter of looking at the numbers and data so far, finding different potential solutions and calculating which one will pay off for you.

The most common ways that companies reduce costs include:

• time streamlining of existing processes,
• digitization and automation of routine activities (for example, document processing),
• negotiation of better conditions with suppliers,
• purchasing a smaller amount of stock,
• introduction of home office or remote work,
• shortening maturity of invoices.

If you need a little nudge to get you started in your search for a suitable way to save costs, arrange a free consultation with us. We will engage gritical thinking and together, we will find ways to help your business overcome the challenging times and enable long-term growth.