How Companies Can Thrive With a “Less Is More” Strategy
While COVID-19 has undoubtedly caused significant hardships, one of the silver linings has been that many people and businesses have learned to operate with less than they’re accustomed to. From companies having less in-person oversight of employees as they work remotely to consumers getting by with less purchasing, having “more” isn’t always necessary.
On the contrary, many businesses and individuals thrive with less. For example, in the midst of the Great Recession in 2008, Sony Pictures Entertainment had its most profitable year up to that point. The success was likely due in part to consulting from The Energy Project on slowing down, taking breaks and other actions geared toward keeping employees engaged and energized, as The Energy Project’s founder and CEO Tony Schwartz explains in The Harvard Business Review.
So what does that mean for procurement and finance teams as businesses re-open? By embracing a “less is more” strategy, they can attain long-term cost savings, such as by having:
- Less office spaceBy adopting long-term remote work policies, companies can save significantly on commercial real estate. While many businesses will still want to maintain offices and have employees interact in-person, adopting a more flexible policy could enable companies to reduce their square footage.
For instance, rather than each employee having their own desk that only gets used part of the time, companies could operate in smaller spaces with flexible desks that employees use whenever they’re in the office.
- Less spending on office equipment and suppliesWith less emphasis on employees being in the office on all workdays, companies can potentially save money on procurement costs for office equipment and supplies.
That’s not to say that this cost will disappear, and some spending will need to shift to tools that enable remote work, but companies can still save money overall by reducing certain purchases like printing supplies, since employees working remotely can view meeting materials digitally.
Plus, companies can expand the lifespan of their purchases. For example, procurement teams might source less office furniture due to needing less office space while at the same time focusing more on procuring high-quality items that don’t need to be replaced as frequently. Especially since these purchases might be used less frequently if employees work remotely part of the time, these purchases can potentially last longer.
- Fewer travel expensesWhile the future remains unclear, business travel could see a sharp decline, considering how many employees have embraced virtual meetings during this pandemic. Going forward, finance teams might be more hesitant to approve travel expenses if business goals could similarly be achieved remotely.
This expense will vary significantly by industry and from company to company, but in general, the more that employees learn to connect well with others online, the less need there will be for run-of-the-mill business travel. Instead, trips could be reserved for only those that have a clear ROI and which have a significant need for in-person interactions, such as attending important industry conferences that lead to sales.
Save Time and Effort
In addition to saving money by learning to do more with less, companies can also embrace this mindset to save time and effort.
For example, procurement and finance teams should look for ways to simplify their purchase approvals. Instead of micromanaging every purchase by having employees send complex request forms, procurement and finance teams can set up a pre-approved supplier list and provide automatic approval for purchases from these suppliers below a certain threshold.
Then, procurement and finance staff can focus their time and effort on more complex purchases and other strategic efforts like improving supplier diversity.
Leveraging technology like an e-procurement or spend management platform can help in this regard, as you can source and maintain a list of approved suppliers, streamline approval workflows and gain visibility into spend, among other benefits.
Want to learn more about how e-procurement/spend management technology can help your company simplify operations? Request a free consultation with our product experts today.
If your organization needs to source PPE or cleaning supplies during this difficult time, we may be able to help. Please reach out to request access.