To Save Money: Overcome 3 Obstacles!

Conducting a cost optimization approach is virtuous. However, the latter may be in vain if the project fails before or during implementation or if the savings evaporate afterwards. Some tips to overcome the risks on the way to cost optimization.

More than three quarters of optimization projects never reach their initial goals. Between the decision to launch and the concrete recovery of savings, many risks threaten the project. The identification of risks, as well as their treatment make it possible either not to consume resources unnecessarily by not launching certain projects, or to considerably increase the chances of success. The list of these risks is long, so here is a focus on 3 risks encountered regularly.

Obstacle n ° 1: Presence of obstacles from the start

One of the main risks is already simply not being able to start the cost reduction campaign. There may be many reasons for this: too much dependence on a supplier, perception of insufficient savings potential, fear of internal impacts, lack of time, and sometimes even a combination of these factors.

Take the case of the apparent lack of potential with dependence on suppliers. Beyond objective dependence, there is also very often a subjective or emotional dependence: “we have been working with him for a long time” or “he knows how to be accommodating”,…. everything that the supplier can do very well to make himself unique and indispensable! We must therefore be able to overcome subjective dependence. For this, we can rely on a benchmark, a comparison of the prices of the different providers on the market. The provider may be favored but remaining within market prices.

Obstacle n ° 2: Poor framing of the project

An insufficiently precise project scope and responsibilities can generate serious misunderstandings or even resistance. This resistance can come from a site manager or an operational. Most of the time, they come from the fact that this person has a bad perception of the project. However, the project will be difficult to carry out without the support and involvement of this person. To succeed in generating this commitment from everyone to the project, it is important to establish internal communication, as early as possible, to inform all contributors about the project, their role and their contribution. The framing of the project is necessary for clear and effective communication.

3 ways to structure a project

Three components will make it possible to frame a cost reduction project: first, the very definition of the project (issues, objectives, planning, roles and responsibilities), second what can be challenged and what can only be challenged with more difficulty (for this it is necessary to carry out a detailed analysis of the budget lines, to audit and to know how to exclude certain perimeters) and thirdly, to validate that other initiatives will not call the project into question.

If the project is threatened by other priority internal projects, then perhaps the start of the project should be questioned. These priority conflicts can be generated by the implementation of a new ERP, a new regulatory constraint, a move… They should be anticipated!

Obstacle n ° 3: Choice of resources

Some categories of expenses require less expertise than others. For example, the purchase of office supplies does not require special knowledge of the legislation, or of the technical specifications of the products, moreover there is easy access to service providers, even urgent requests, supported by numerous catalogs and gifts! That said, it must be recognized that even in these categories requiring little expertise, a good knowledge of these purchases makes it possible to go even further by knowing the price levels that can be achieved by improving the processes or by redefining the need.

For many other categories of expenditure a solid level of knowledge and experience is required. It may be a question of knowing how to analyze possible insurance coverage failures, or of having a complete vision of the costs for the vehicle fleet (by integrating, for example, the weight and the constraints of taxation).

Common pitfalls

More generally, the errors often encountered in a company are among the following: inaccuracies or even dead ends on operational or even legal aspects or the failure to take into account hidden costs. This involves, for example, having neglected in the analysis the penalties for breach of contract, the possible costs of taking back the equipment. The lack of questioning of what already exists (this questioning is not necessarily necessary but it is sometimes the main way or the only possible way for significant optimizations). Or, supplier casting errors (for example choosing a supplier with a heavy structure when you need reactivity).

The skills to have

To optimize purchases, it is necessary to master multidisciplinary skills. It is necessary to combine technical knowledge on the services or products in question, knowledge of the procedures in place in the company, knowledge of supplier markets for each product or service and the ability to manage a project and bring it to fruition. Beyond the issue of competence, availability is fundamental. Renegotiating a contract or following up on a quarterly basis doesn’t take 15 minutes!…

Social Entrepreneurship, In A Nutshell?

Businesses are at the heart of citizens’ lives. They have an important role to play within society and have the opportunity to raise awareness and influence so that everyone adopts new behaviors.

Societal entrepreneurship consists in creating an economic activity by linking the values ​​of Sustainable Development to companies, that is to say to Corporate Social Responsibility. The objective is to create a company whose products and / or services meet social and / or environmental needs by creating added value and jobs that cannot be relocated.

For the 7th consecutive year, OpinionWay has conducted for Ashoka an unprecedented survey on the perception of social entrepreneurship in France. This survey reveals the perception of women entrepreneurs (48%) and social entrepreneurs (52%) and the general public regarding the capacity of social enterprises to respond to societal problems.

It emerges from this study that the link between inventing new economic models, reconciling social impact and economic profitability leads the actors of social entrepreneurship to innovate in their economic models so that they become credible and bearers of hope in the future. . This Barometer highlights the importance for the structures of the social and solidarity economy to involve all stakeholders to create a model that will prove to be successful in the future.

Climate issues at the heart of concerns

For the first time since 2010, climate change is at the top of the agenda. Indeed, 70% of social entrepreneurs and 38% of the general public identify the climate as a major challenge to be addressed as a priority. Three years after COP 21, these figures show a real awareness of the urgency of climate issues.

However, behind the challenge of COP 21 to contain global warming, the essential question arises of reviewing the ways of exploiting raw materials, of producing, of transforming, of consuming, of working and of redistributing. It is therefore essential to create innovations in favor of sustainable development that make it possible to resolve this challenge.

Entrepreneurs are concerned by the major concerns around the issue of climate because it is a major issue for the near future, the fight against global warming requires awareness at the level of companies whose activities are polluting. Adopting transparency in the field of ecology is becoming a virtual necessity for companies, as the impact of human activities on the environment can no longer be underestimated. Today, companies that help limit carbon emissions and promote biodiversity are in a position to positively influence consumer habits, and to participate in an awareness that will be beneficial for all.

Entrepreneurship and the challenge

Entrepreneurs can help instill in young people a taste for creation, risk taking and personal investment. Entrepreneurial culture can in its educational mission teach students responsibility, confidence in their ideas and self-sacrifice to carry out a project. Integrated into educational programs, the company could thus become a vector of social justice and a fair economy.

The social enterprise is today a model of organization which has the wind in its sails, and responds to the new problems arising from the financial crisis. Entrepreneurs who place collective utility, participatory governance and a stated ambition for progress rather than profit at the center of their project can be considered as precursors of a united economy capable of making society better. Through their practical approach to problems and the solutions proposed in the field, business leaders therefore seem likely not only to raise awareness, but also to forge the foundations of the society of tomorrow.