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Organizational Initiative to Reduce Cost Essay Sample

Organizational Initiative to Reduce Cost Pages
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As part of our organizational initiative to reduce cost, I reviewed the financial accounts of the organization for the last 7 quarters. The single biggest offender of our budget has been corporate travel, accounting for more than 20% of the organizational expenses today. Therefore, I recommend implementation of restrictions to the travel policy as the best option to reduce organizational cost. Detailed analysis of the travel expenses for the last 7 quarters revealed the following key statistics that laid the basis for my proposal: 1)82% of the travel was for attending internal company meetings (not customer meetings) 2)40% of these meetings were just scheduled for a couple of hours. a.To elaborate, the meeting time was about 2 hours, but the employee’s travel time (time in flight) accounted for more than 5 hours on an average b.In some cases, employees flew in the previous day, so as to attend early morning meetings, adding more travel cost for hotel accommodation and food 3)54% of the travel reservations were made in the week of travel, causing the fares to be significantly higher, as compared to when tickets are booked in advance.

Internal headings would help guide the reader. Last month, I shared the above statistics with two director teams who had the highest travel costs in our organization. I sought their co-operation to try the video conference facilities that are available in most of our major office locations, in lieu of travelling to attend meetings in person. Both the teams tried it out for a month and are extremely happy with the outcome. Video conferencing worked just as effectively as face to face meetings . They were also amazed at the increased productivity they witnessed in their teams during that month. They could now effectively use the time, which was previously lost in cars, airports and planes, to complete their work and even had more free time to spend with their families. Two teams avoiding travel for internal meetings, just for a month, saved us about $4000. If the entire organization can use video conferencing instead of travelling to meetings, we will be able to save at least $8000 per month on travel costs, which is way more than our target of $5000.

To encourage this transition, 1)I have requested the corporate communications team to advertise the video conferencing facilities available today and they have been passing around fliers and email communications to all the organizations in this regard. Any business document over a page has continuation page headings…. 2)I have sought approval from the corporate communications office to dedicate three of the fifteen video conferencing facilities in this area for the sole use of our organization. This should be more than sufficient to cover our meeting needs. 3) I have added new sign-up sheets that can be accessed via Microsoft Outlook for teams to reserve the conference facility in advance for meetings. The booking process is very simple and user friendly. Based on the above, I recommend introducing a more stringent policy for seeking approval on all travel requests going forward: 1)Starting Oct 1 2012, all travel requests need VP (Vice President) approval 2)Employee should send email to their respective manager, requesting approval for travel, at least 2 weeks before the proposed travel date. 3)Key details to be included in the email are:

a.Why is it required to travel?
•Clear business justification high-lighting the need to travel versus using other options like video conference or teleconference b.Who are you meeting with?
•Travelling to participate in internal company meetings is highly discouraged •Travelling to meet with customers will receive careful consideration based on the business need c.Where is the travel budget coming from?

•If your trip is being requested and paid for via an external project or another department cost center, please note that clearly in the justification. d.What is the estimated cost for the trip?

•Cost estimation should include the planned travel dates, airfare, rental car rates, hotel and food expenses as applicable 4)Manager will screen the requests and forward the ones that have a valid business need to VP for approval. 5)Employee should book the trip only after receiving VP approval in email.

I am extremely confident that this revised policy will not only enable us to save a significant amount of money, but will also improve employee productivity and pave the way for a positive, cost-effective and sustainable cultural change in the area of business communication.

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