FIRMS seeking to cut costs should adopt a structured plan and communicate the measures effectively to staff, said Ernst & Young Associates managing director Mildred Tan.
A recent Ernst & Young global survey of 250 top executives showed that most companies were cutting costs across the board. But they were least likely to cut spending in areas seen as vital to business success, such as risk management.
Mrs Tan noted: 'Given the slowdown, many firms have cost-reduction programmes in place and this takes on increased importance for those seeking to maintain profitability and competitiveness.'
First, they need to define a clear vision of what they plan to achieve, which is accepted by their executives. Next, firms should examine all areas of their expenditure and assess the savings potential.
Mrs Tan said it is crucial to 'balance the short-term and long-term savings to get the right pace'.Also, '...communication must be in place to rally people around these initiatives'.
This article was first published in The Straits Times on January 05, 2009.
