"Everything that your customers won't pay extra for, comes out of profit!"
Costs are determined by the prices of raw materials plus the expenses of the processes used in operation. Processes used in operation generally fall into two categories--those required to transform raw goods into finished product, and those that handle the movement and storage of information
After studying and improving business processes involving the storage and handling of information for more than
20 years,
we have noticed that most of these processes can be categorized into
one of 4
areas:
These are important, even essential functions, but
the cost
of performing these tasks does not add value to your service or
product. By value, I mean, would your
customer be happy
to pay you $100 more for each purchase if they knew your costs in one
of these
4 areas were $100 higher than a competitor?
1.
Collecting data from
distributed locations to a central point
2.
Distributing data from a
central point to multiple locations
3.
Processing large volumes of
transactions of a similar nature
4.
Moving data across 'system'
boundaries