“Adopt automation that will result in structural cost reduction"

Amit Gossain, Managing Director, KONE India on five ways to manage costs during a downturn

Published 5 years ago on Oct 03, 2019 1 minute Read
Vishal Koul

Cut costs strategically: Rather than adopting shortsighted measures such as salary cuts, distributorship severance and headcount reduction, which are damaging from a strategy perspective, cut down discretionary spending which do not have direct impact on sales, customers or after sales service.

Outsource processes: Farm out non-critical tasks to third party providers. Utilise every opportunity to consolidate or debottleneck overlapping or sub-optimised processes. The efficient vendor relationships that get developed will create a continuous cost-management system.

Invest in technology: Adopt automation that will result in structural cost reduction. Digitisation will create efficiencies in overall operations by reducing overheads. Doing so during a downturn, will place your company ahead of the competition, and make you future ready when demand rebounds.

Redefine selling strategy: Focus more on retention than winning new customers. Monitor buying patterns and respond quickly through a customised offering. In-built financing and unbundling will alleviate downward pressure on revenue by controlling marketing expenditure.

Selective hiring: Unless necessary, realign existing talent to deal with the new market reality. This will keep the hiring budget in check and create goodwill among employees. Not only will existing employee talent get optimally utilised, promoting from within will also increase employee commitment.