Volume 7, January 2002
Controlling expenses takes patience, practice and teamwork. In this issue, we offer you three ideas you can use immediately to make the best use of your resources and improve service to your clients.

 		 
Contents
  • Reduce expenses
  • Improve efficiency
  • Solve problems
  • Our offer for savings
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    Reduce Expenses, Not Services
    — by Jane Conlon and Mark McConkey

    The beginning of the year is the ideal time to take a fresh look at how you can ensure financial stability for your organization. You can't always control your revenue. You know how unpredictable funders and donors can be! But you can exercise close control of expenses. There are two major areas to explore when looking to reduce expenses: costs for goods and services, and your internal operating efficiency.

    As your organization's leader, you probably don't have time to always be on the lookout for ways to cut expenses and increase efficiency and maybe you don't think the savings would be worth the effort. You might be surprised at how small savings add up. The most important first step you can take is getting your staff involved in being savings-conscious and linking their actions directly to the economic health of your organization.

    Small savings add up
    Leaving aside payroll for the moment, you can probably reduce each line of expense by trying some of these tips and mustering the creative thinking of your staff. Why not strike a savings committee to develop and implement an expense savings plan and challenge the members to save at least 15 percent over the year? Make it even more interesting by putting any savings over the goal into a bonus program for the committee and staff.

    Heating and hydro
    Utility bills are usually big expenses but areas where staff can contribute to savings. Energy conservation not only reduces costs, but also helps protect the environment. Here are some easy savings that will add up:

  • Upgrade your lighting and thermostats and save up to 25 percent on your hydro bills
  • Install motion detectors to control lighting in frequently unoccupied areas, such as restrooms and storage rooms
  • Turn off computers, fax machines and copiers at night
  • Save 60 percent of the energy cost of vending machines by putting them on a timer, so they don't run at night, and situate them out of direct sunlight
  • Perform scheduled maintenance on units including cleaning condenser coils, replacing air filters and checking ducts and pipe insulation for damage
  • Carry out regular checks on thermostat settings and make staff aware that costs rise by 8 percent for each 1° C of overheating
  • Do not block radiators and heating vents with furniture or stacks of files
  • Because draughts often cause staff to crank up the thermostat, it pays to seal cracks around windows and outside doors
  • Consider locking in your energy rates now when rates are low and shop around for the best deal

    Insurance
    Insurance is a necessity for all organizations. Agencies can pay too much if they rely on one insurance broker for quotes. The insurance company, calculated as a percentage of the premium, pays brokers a commission! This means, the higher your premium the more they get paid. Use at least two brokers to obtain quotes. Consider high deductibles. Ask about claims-free discounts, discounts for safety measures, and if the broker would consider lowering his or her commission for non-profits and pass the savings on to you. Choose monthly payments.

    Paper and office supplies
    Implement paper-reducing strategies such as double-sided printing and reusing paper for drafts and faxes. Call the senders of unwanted faxes and tell them to remove your number.

    Printing
    Coordinate your printing needs with those of other agencies. If you and your cohorts are willing to stay with the same printer you can expect to negotiate savings up to 20 percent. Last minute rush jobs cost a lot more. Ask your printer for a price list for different turn-around times and make sure staff plan their work to take advantage of the lowest rates. Question bills for rush jobs and take action to prevent this expense.

    Couriers
    Like printing, rush courier services costs considerably more than next day delivery. Compare Canada Post rates for Xpresspost next day delivery against courier rates. Again, make staff aware of the higher cost of rush service and take action when appropriate.


    The way to efficiency

    Work processes shape the efficiency of your organization. And inefficient work processes tie up valuable resources. Streamlining processes gives you the freedom to shift resources where they can be used to service your clients.

    A quick and inexpensive way to improve administrative work processes is to use a tool developed by IBM called Fast Analysis Solutions Technique (FAST). FAST is delivered in a one-or-two-day workshop to teach you how to analyze and define improvements that you can put into immediate action. In addition to saving time and resources, another major benefit of trying FAST is your staff will learn to think differently about the work they do, understand it from a process perspective and identify ways to streamline future work.

    Typical improvements you can expect to achieve from the FAST approach are:

  • reduced process costs
  • reduced time it takes to complete a process
  • fewer errors and non-value added work activities
  • improved use of your existing technology
  • opportunities to explore outsourcing administrative functions such as accounting or payroll to reduce cost

    Further benefits of using FAST include complete documentation of the improvements, a process flowchart and cost benefit analysis on the amount saved.


    Problems eat-up resources and enthusiasm

    Do you have a business problem that just won't go away? Things go wrong, work gets behind, paperwork gets lost, clients complain and you and your staff end up frustrated and discouraged. Look at eliminating problems as an opportunity to contribute to the success of your organization. Challenge your team to get rid of problems forever and change discouragement to motivation!

    To be productive, problem solving must be structured, analytical and collaborative. You may be better off bringing in an expert from outside the organization to do this. Outsiders bring an unbiased approach and a new perspective, plus a good consultant will provide you with a well thought-out method for finding the best solution. When choosing a consultant make sure they will build capacity in your team for future problem solving. The process needs to address each phase of problem solving using proven problem solving tools.

    Best practices problem solving must include:
    1. Problem identification: This phase focuses on validating the problem, separating cause and effect along with defining the root cause.
    2. Solution development: The team develops alternative solutions and reviews each one based on the positive impact it may have on the problem. Potential risks and difficulties would be explored in order to select the best solution.
    3. Solution implementation: This phase puts in place an action plan to implement the solution. Outcomes, time schedules and resources are clearly defined.
    4. Follow-up evaluation: This evaluation measures the cost and the impact of the solution to ensure that the root cause of the problem has been addressed.


    Invest in saving

    MCC Workplace Solutions can offer you a line-by-line budget review to determine how small changes can make a notable difference. In addition, we can research the potential savings of using alternative suppliers. We also offer FAST and problems-solving workshops that may significantly reduce your expenses and prepare your team to actively engage in making your organization more efficient. The length of the workshop depends on the scope of the process or problem. Usually a one- to two-day workshop is sufficient.

    As certified facilitators, we ensure the workshop is tailored to the needs of your organization and staff and focuses on achieving your objectives.

    Improve your financial picture with our help
    By investing under a thousand dollars in consulting fees, you will be able to focus your time, energy and resources on your core services. MCC Workplace Solutions can help you improve efficiency, eliminate problems, and reduce expenses by 5-15 percent. If increasing the financial stability of your organization interests you, contact us now for a free preliminary budget assessment and efficiency proposal. Reach us at 416.466.7284 or by email by pressing contact us.


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