Cost Optimisation : Lip service or real action

In recent past most of the articles and webinars are focused on Working in the new Normal or Cost Optimisation. #Blockchain seems to have gone down the order ??. In the discussions on cost optimisation what I am seeing is that a lot of focus is being put on low hanging fruits which may give a one time benefit and are short term or it ends up with moving to the cloud recommendations. May not be wrong but in my view it’s Business first and customer next. 

To achieve something continuous and long term needs one to think out of the box and be disruptive. A personal experience comes to mind which I think changed the way I started to look at cost optimisation. It was a discussion between me and my better half in 2008 during the subprime crisis. 

Me : Biwi (In Hindi wife means Biwi) don’t you think our monthly expenses seems to be on the higher side and with times being tough can we look to contain our spends. 

Biwi : Yeah sure let’s check what we can do to reduce our monthly spends. 

She started to list the big monthly buckets which obviously were rent, car running expenses including driver to drop kids to school (50 kms - 4 trips a day), electricity (24 hours use of AC), rations, eating out, golf ?? and help’s salary plus the usual small ones  

Me : I think we should see if we cut down a bit on eating out (believe me I am a foodie and it was not easy for me to recommend )

Biwi : No way it helps me relax, socialise and destress (I thought I was the only one stressed ??). Why don’t you cut down playing golf to half ?

We at least tried and the discussion ended with us agreeing we are not overspending 

Come Aug 2009 I decide to change my job and move from Chennai to Bangalore. Obviously before moving we thought about the disruption and change it would mean to us and the boys. We had lived in Chennai for 9 years, it was comfortable, but we all agreed that it will not be a permanent address for us. The move to Bangalore happened. It was about leaving the comfort zone and adapting to the change. 

Boys adapted to the new city like fish in water, Biwi enjoyed the cosmopolitan culture (read speaking Hindi ??) and I enjoyed the new job. The biggest surprise was that post this move our running expenses went down by almost 50% without any compromise in our quality of living..The savings came from the first 3 items listed above and we hadn’t even considered them during the discussion as it was considered as a given with no scope of reduction. Rent went down by 50%, car running expenses went down by 70% as schools in Bangalore had a very matured school bus service unlike the maxi cab service in Chennai and Electricity costs went down by almost 60% as I did not use an AC in the first 3 years even now it’s only 2 months in a year. And the icing on the cake is I now have a permanent address. 

A big learning out of this for me was to look for things beyond the obvious, be ready for disruption and change. In every exercise of getting efficient, increasing productivity or achieving optimisation I started applying these and have seen a lot success come my way.

Most of us are looking at the next in the supply chain to reduce costs but I think it’s time to look within What we need in these times is fast elimination and redirection of underproductive costs and behavioural change to result in sustainable cost rationalisation, rebalancing and optimisation. The question is are you ready to look beyond the obvious and be disruptive in your journey of cost optimisation  

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