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Weighing costs and value
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It is September and budget season is upon us again. The next four months will be spent wrangling and maneuvering to fulfill area manager’s needs--perceived, real, and clandestine. This process is faulty at best, and downright disastrous at worst. If you have a desire and sense of obligation to perform your fiduciary duty, a few points are in order. These come from an article that I wrote several years ago and which appeared in TAPPI’s “Solutions!” magazine.

First, look at all the inputs to your area of responsibility. Can you buy them less expensively from other sources than those from which you buy them now? Stated another way, is there a way to receive more value for the expenditures that you must make in order for your area to function? Be broad about this exercise, don’t just think of the things you procure from outside your organization, but all the internal services you buy as well. Can you buy those internal services at a better price outside? What will be the disruption to the organization if you move them outside? Can you use data you gather from outside services to challenge inside ones to do things better and less expensively?

Second, look at the services you provide from your area. Are you providing the best value possible to your customers, internal or external? Is your area vulnerable to being outsourced? What can you do to change this and make your area of responsibility more competitive?

The above two paragraphs are easy for me to write, extremely difficult for you to implement. I recognize this. However, if more managers would take the tough medicine necessary to do these things, it would make the entire entity for which they work far more competitive in the big, bad world out there.

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