• January 7, 2021

Why I love cost reduction & still won’t fire anyone from my team

cost reduction

Why I love cost reduction & still won’t fire anyone from my team

Why I love cost reduction & still won’t fire anyone from my team 1024 703 Webteam

4 ways how to avoid resource reduction in your company by implementing tweaks to your existing infrastructure. Ensuring that the past big investments are kept in place and are only optimized by adding new technologies or materials.

1. Start by evaluating the status quo

Your past big investment, e.g. an automated software testing solution, has brought a major change in your company. Introducing a new technology that saved your employees time, so that they could concentrate on complex issues. Therefore saving the company time and enhancing software quality.

The investment took quite some time and effort, on your side. Evaluating all the possible vendors, running trials and negotiating contracts and prices. Continuing by reallocating budget from other sources. Finally  getting approval from management, to proceed. The success confirmed and demonstrated that the valued employees could now focus more on their expertise. A positive side-effect, your employees gained more appreciation for their work from management.

Absolutely normal: self-doubt

And then it hits you 2-3 years later. You catch yourself, as you are looking at this large cost block in your budget, and think – really? Why does this cost block take up so many resources? Was that my idea, my achievement, we had a huge success and have seen the overall benefits within the company. But still the cost block is huge, the setup of designers licenses and execution licenses, in other words, the tooling weighs too much in the current situation. And  now management issued a clear assignment – to reduce costs! Evidently you want to avoid firing anyone in your team.  The costs  of tooling (without hardware, nor training, nor employees costs) vs. employees costs do not tally.

But does that mean it is necessary to start all over, when you introduced the automated software testing solution?  You suddenly question yourself if the original decision was right. Then it was, now you have to go a step further. Optimizing your existing investment, by making changes giving a smooth transition and avoiding a drastic cut. This by implementing yet another solution, that needs a re-investment and fails to bring the immediate cost reduction that was required.

You take a deep breath and make a ground breaking decision: I will not fire my employees, I will find a way to reduce the costs by reevaluating the current situation. That does not mean, that my decision was wrong. It was right and now needs to some fine tuning.


2. Continue now evaluating possible solutions as tweaks and add-ons not as new investments

Time to figure out what is on the current market and what could be adjusted to achieve  a smooth transition that reduces costs over time.  Yes, research and testing all over again, but this time you can call on your existing experience to find a new solution. You can also engage your trusted employees, by asking them for their input on what is missing, what could be eliminated, what is appreciated and what changes they would implement. With these additional sources, the research should become less time consuming. Ideally you will find a vendor that offers you the benefits that are lacking with your current solution.

First you will contact your existing vendor and renegotiate the terms and conditions. That alone should give you a quick win.  Further,  it is important to contact 2-3 new vendors and ask for quotes. They will present you with a quote that involves a time frame, a suggested transition of old to new and most importantly the set-up costs and the maintenance costs for the next 4-5 years.

3. Eliminating the fear from your employees, of losing their jobs to yet another new technology

You have already involved them during the current situation evaluation. But why stop there? Engage them and get their expertise on this topic. Not only will you receive a deeper insight of the technology and what to look out for, but also you will enhance their confidence in you and the new technology. If you can reduce their fear of losing their jobs, it would be a triumph. By Involving them during the evaluation process and then again engaging them in the final choice of vendor, they will not only give you insight but also their confidence. You can present your solution to upper management, if the management requires a second opinion from your team, they will have your back!

4. Presenting the upper management with the long-term cost reduction and benefits.

By presenting your solution as a tweaked new technology incurring no further costs, but instead will maintain the status quo and will become even more efficient and most importantly produces less costs over the years, will give you the needed result to keep your promise – keep the jobs of your employees.

With the help of your team and the new vendor, you should be able to present a new budget covering a time frame of 4-5 years. Showing the long-term benefit that they will achieve, without firing people. It is also a win-win for the company. They can demonstrate that they are running strong & are keeping their staff employed. Which again, gives them the needed quality statement for further partnerships.

In the end you win by keeping your promise. You did not undermine your first investment. And you demonstrated a long-term mind set as a smart way to run a business.

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