The Codian Business Case Study: Bending the Cost Curve with Creativity
Oftentimes, we are usually told, the focus on cost means efficiency. Doing better what is already being done is what usually gets promulgated.
However, from our observation, cost productivity champions are preferring a different tack. In summary, the optimizing approach, instead, focuses on effectiveness. These businesses focus on opportunities to produce revenue, create markets, and change the economic characteristics of existing products and markets.
New facts that came to light recently was a business case that dissected the reason why most businesses couldn’t stop bloating overhead costs. It was simply down to the fact that they lacked creativity and many purchasing decisions were entangled in old processes.
Whereas, as a media company, there is a sense that to keep producing gripping media, we need to own the latest camera and media equipment. This however, isn’t the best cost structure and it doesn’t always give us the flexibility we need to produce the best results.
Arguably, through creative outsourcing and logistical planning, we have managed to attain crucial savings somewhere in the region of 10% to 20%. This figure however is loosely derived from three basic technology considerations.
Firstly, by renting equipment on a project basis, we can always guarantee we are getting the best suite of tools to fulfil a project’s requirements. Secondly, outsourcing helps us overcome cyclical media technology sector, where usually any one equipment goes out of date within three years—which is astoundingly short. Thirdly, renting frees us expensive maintenance constraint for some equipment that see seldom use.
Most importantly, this rental model has allowed us to run a nimble cost structure while improving our equipment repertoire.
At The Codian, we believe that the rental model is becoming an economic necessity. We believe this is a measure that businesses need to look into when they consider the flexibility and the cost strategy that their business units need to pursue.
Arguably, not owning the equipment gives us the best return from the equipment we use. As the business case alluded to, without creativity, it is very hard to curb the increase in overhead expenses. It must be noted, the major drawback of cost effectiveness by an oversight is that it numbs the relative focus on the top priorities to fuel your profitable growth.
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