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Articles Finance Transformation

A simple guide to cost reduction

Cost reduction and CSR

Whenever discussing cost reduction it’s important to consider corporate social responsibility as a starting point. Ideally, companies can find the right balance between reducing costs and thinking about employee and business partner (e.g. supplier) impacts. Employee layoffs can have a devastating effect on individuals. Business partner changes can put companies out of business. When planning and executing cost reduction these impacts should be considered. In real life, this might mean trying to offer employees other options (reduced hours / different contract terms / new profit-generating roles) or business partners a revised agreement.

A model for cost reduction

A good starting point for cost reduction is to consider the type of costs incurred within the business. Accounting provides a consistent way to look at this. Costs are either tied directly to production or not. For example; in a manufacturing environment there are factories with machines, operated by people to produce products. Cost accounting is used to calculate ‘cost of goods sold (COGS)’. This is the cost that can be directly tied to converting the input materials to the finished product. In this case by adding the raw material, labour and utility costs.

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Articles Project management

Improving project management by focussing on strategy and people

Many of the projects I’ve come into contact with over the years run into problems that stem from a lack of focus in two areas. A lack of ability to effectively deal with people. And a lack of depth of knowledge of strategy.

I’ve been around projects for almost 20 years. Working in roles such as systems analyst, business analyst, project manager, program manager, management consultant and change manager. During this time I’ve seen a wide variety of methods and tools applied, but regardless of those, there are consistent underlying problems.

The profile of the project manager is critical to a projects success. What experience do they have? what do they focus on? what tools do they use? how do they manage conflict? a good project manager needs a wide variety of skills.

If I were to estimate I would say around 1 in 5 projects that I come into contact with have good, multi-faceted project managers. The good news is we can all become better project managers and in this article I’d like to address one of the biggest opportunity areas for improvement.

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Articles Technology

A No-Nonsense Guide to Digital and Technology Strategy in 2020

‘Digital’ – A Magnet for Nonsense!

‘Digital’ was and still is a popular term in the business world. In recent years a lot of papers, presentations and communities of interest have appeared on this topic. Unfortunately, the majority of them seem to create a lot of content, but little meaning. Put simply, a laymen could read a typical brochure on ‘AI’ or ‘Blockchain’ and still have no clue what the physical product or service is and how it differs from more traditional techology.

Back in 2000, I first started my career in information technology, not long after joining we were re-branded as ‘information & decision solutions’. I think the majority of people in information technology will be familiar with the constant re-branding of teams and functions.

This is the case with ‘digital’

Digital technology is a hodge podge of technologies which are new / popular / highly saleable. I tried to figure out what the common theme is with technologies that get accepted into the ‘digital’ podium, but there doesn’t appear to be one.

In this post, I’d like to have a plain english, no-nonsense discussion of digital (or more simply new & popular) technologies.

I’ll start by taking a look at what major companies are saying about digital, then I’ll look at structuring it into a simple taxonomy to promote a clearer understanding. I’ll then take a look at key areas of digital one by one. Finally I’d like to talk about the approach taken to develop a digital strategy.

Before getting into the detail I would like to give some advice to anyone thinking about investing in digital products or services:

  • Take a ‘doubtful’ stance, don’t get caught up in the hype;
  • If someone can’t explain a technology; how it works and why it’s useful, in a few sentances to a laymen, do not listen to them;
  • Be careful of conflicts of interests when dealing with suppliers and partners, I’ll talk a little more about this next.