The Journey to a More Mature Approach in Cost Control for Small and Medium Sized Companies
Discover effective strategies to help small and medium sized companies enhance their cost control practices and achieve a more mature approach in managing expenses related to people.
Understanding the Importance of Cost Control for Small and Medium Sized Companies
Small and medium sized companies often face challenges when it comes to cost control. In order to thrive in today's competitive business landscape, it is crucial for these companies to effectively manage their expenses and specifically the expenses related to people which tends to be one of the largest cost items.
The financial climate changed drastically in the economic down turn in 2023 and owners and investors started looking to responsible growth rather than just focusing on growth at all cost.
Cost control plays a vital role in ensuring the financial stability and growth of these organisations. Yet it is often not prioritised in the early parts of an organisations growth.
When we looked into this in the UK SME market we found very few companies had started building out Procurement functions - in fact a search found only around 50 Chief Procurement Officers in the UK Midmarket of some 6.000 companies
In our recent "Procurement in a Box" event we asked one of the longstanding procurement experts in the UK James Marland from SAP to elaborate on a Procurement Maturity Model.
In James description companies going through three distinct phases - from breaking things fast in the early phases to a fully built out Procurement function in phase 3 with technology and process controls in place. What does that middle stage or stage 2 look like? And what drives/enables that change from stage 1 to stage 2?
Exploring the Challenges Faced by Small and Medium Sized Companies
Maybe the biggest challenge of all is that focus in SME business has not been on building out cost control or any type of control. Much like James Marland shared in the video snippet above "the Maverick who breaks stuff and gets things done" is the hero at these businesses.
Expanding the GTM reach and driving new revenue, launching into new markets or more products are seen as crucial. In tech companies Engineering and Product are "the untouchables". Delivering more and more product and expanding features sets is one of the most important things a software business can do
FaaST Co-founder and CEO David Obadia summarised the challenges in the following slide:
Not entirely surprising most of the challenged are the same as for the largest companies but some pictured at the bottom of the slide is specific to Midmarket organisationsI
Despite these challenges, it is crucial for small and medium sized companies as they grow to overcome them and prioritize cost control. By addressing these challenges head-on and implementing effective strategies, these companies can unlock significant cost savings and improve their overall financial performance.
Introducing On-Demand Talent Marketplace Solutions as a Game-Changer
On Demand Talent Marketplace solutions offer a game-changing approach to cost control for small and medium sized companies. These solutions provide a more flexible and cost-effective way to manage expenses related to people.
They allow companies to tap into a network of freelancers, independent contractors, and temporary workers as well as start managing the professional services that are starting to expand in the business.
This enables companies to access specialized skills and expertise on an as-needed basis, without the long-term commitment and overhead costs associated with hiring full-time employees. By leveraging these types of solutions, companies can significantly reduce their personnel costs while maintaining the flexibility to scale their workforce as needed.
Moreover, the On-Demand Talent Marketplace solutions provide small and medium sized companies with greater visibility and control over their spending on people. These solutions offer advanced analytics and reporting capabilities, allowing companies to track and monitor their expenses in real-time. This visibility enables companies to identify cost-saving opportunities, optimize their spending, and make data-driven decisions for better financial outcomes.
Overall, On-Demand solutions revolutionize cost control for small and medium sized companies. They offer a more agile, cost-effective, and data-driven approach to managing expenses related to people, empowering these companies to achieve significant cost savings and enhance their overall financial performance.
The solutions also helps manage onboarding and off boarding as well as asset-provision and retrieval as well as adhering to background check practices as well as other compliance items whether IR35 or plain co-employment risks
Effective Strategies to Encourage Early Adoption of On-Demand Talent Marketplace Solutions
To encourage early adoption of these solutions, small and medium sized companies can implement several effective strategies. First and foremost, it is important to educate company leaders and stakeholders about the benefits and potential cost savings associated with these solutions. This can be done through workshops, presentations, and case studies showcasing successful implementations in similar organizations.
Additionally, companies can offer incentives and rewards to employees who embrace and adopt non the solutions. This can include recognition programs, bonuses, or other incentives that motivate employees to explore and utilize these solutions. By incentivizing employees, companies can create a positive culture around On-Demand Marketplace solutions and encourage wider adoption throughout the organization.
Furthermore, companies can provide training and support to employees to ensure a smooth transition to such solutions. This can involve offering training programs, access to user-friendly software platforms, and ongoing support from dedicated procurement teams. By providing the necessary resources and support, companies can empower employees to effectively utilize On-Demand Marketplace solutions and overcome any initial challenges or resistance to change.
Lastly, companies can leverage success stories and testimonials from other small and medium sized companies that have successfully adopted such solutions. Sharing real-life examples of cost savings, improved efficiency, and enhanced visibility can inspire other companies to embrace these solutions and accelerate their journey towards a more mature approach in cost control.
By implementing these strategies, small and medium sized companies can overcome barriers to adoption and drive early adoption of On-Demand Marketplace solutions, unlocking significant cost savings and improving their overall financial performance.
Accelerating the Journey to a More Mature Approach in Cost Control
To help companies start the journey and implement a On-Demand Marketplace FaaST Solutions has removed a lot of the barriers (if not even all the barriers) SME are faced with as seem in the picture below:
By providing a best practice process around buying and providing a predefined supply chain that is performance measured and managed by FaaST we are mitigating the need to hire a number of supply chain or procurement FTE or develop that knowledge within the finance function
Furthermore we are also aware of getting to value fast and that's why we will have you up and running in a week's time. Of course not charging you for the implementation helps drive value faster as well
At the core of the offering is a ground breaking but simple pricing mechanism - to only charge you after you have received value (the work of the contractors have been delivered) and directly related to the value you have received.
We call this pay-as-you-go or value based pricing where we only charge you for the value you have received monthly in arrears We don't ask you to commit contractually to spend any money with us and you can terminate at your convenience
Lastly we are offering our clients a financing solution where you can manage when you pay for the work your contractors have delivered. We believe many SME companies will love this ability to manage their cashflow.
At FaaST Solutions we refer to this as the FaaST principles which we think are crucial to enable midmarket companies to start their cost control journey
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