August 2010 Inview
Five Ways To Reduce Office Overhead Today
By Tod Snodgrass
Office overhead costs tend to increase over time. Without proper procedures, systems and controls, overhead has only one way to go: up. The good news is that non-people-related expenses can be substantially reduced with virtually no affect on how your association functions. If anything, the changes will probably be positive.
1. Shift costs. With the explosive growth of the Internet over the past decade, more and more organizations are exploring ways to efficiently and effectively disseminate material while cutting costs. For example, every year thousands of associations and nonprofits produce and distribute (i.e. print and snail mail) millions of printed booklets, catalogs, manuals, brochures, notices, bulletins, flyers, etc. However, a growing number of organizations have adopted a much less expensive method: Stop printing/mailing them out altogether; instead, send them out via e-mail attachments (PDFs).
The good news is that cost shifting is relatively easy to implement: Just post the items (booklets, catalogs, manuals, brochures, notices, bulletins, flyers) as PDFs on your association's website. Members can then download the content as needed. Potentially, there are several good reasons for adopting a cost shift policy when it comes to disseminating (previously printed and mailed) material over the Internet:
Immediate response. The visitor to your website can get a PDF into their hands in a matter of seconds or minutes. Snail mail may take days to arrive.
Timely information. Websites are usually updated on a regular basis. A litho-printed piece, by comparison, is potentially obsolete the first day it is produced.
Cost savings. When someone downloads information, this reduces/eliminates the need for your organization to: produce the printed/copied material, incur distribution expense, as well as mailing/shipping-related costs. It is the recipient's choice whether to print out some, all or none of the PDF material you provide them.
Moving from printed media to electronic distribution of the previously printed material can result in an immediate cost savings of 50 to 80%.
2. Stop automatic print distributions (of internally consumed material). Many organizations routinely send reports, books and manuals to executives, board and committee members, and others. This can annually add up to a lot of wasted money since experience has shown that many of these printed items are not always read, appreciated or even retained by staff and volunteers. Many just wind up in a drawer, on the shelf or in the round file.
Post these reports, books, and manuals on your association's members-only or internal website: Alert all appropriate recipients via an e-mail blast that a new report, book or manual is available for them to review and/or output on their end. Automatically email very important or timely reports, books and manuals to appropriate employees as a PDF attachment.
Only provide a printed hard copy upon written request or if the cost of same is to be billed to the budget of the department making the request for a printed copy of the item in question.
The potential cost savings available, by moving from distributing printed material (reports, books and manuals) to all-electronic (PDF) versions can be 50% or more.
3. Reduce (or eliminate) inbound fax transmissions. Converting to a no-inbound-fax policy can save your association a large annual sum since you will no longer be paying for paper, toner, etc. Request that those who normally send material by fax to convert them to e-mail attachments. Once the item has been received, it is your organization's option to print it out, or not: If not, then there is no cost. If yes, the attachment can be printed out on the lowest cost device within the association, say a digital copier, which is probably less expensive than copies outputted from the fax machine.
Potential cumulative annual cost savings can be substantial once you substantially reduce (or stop entirely) accepting inbound faxes; on the order of 40% or more.
4. Convert higher volume digital output/copies to litho printing. Litho printing is preferable, in quantity, compared to output from desktop printers and copiers, for several reasons:
Costs less: In quantities of 1,000 or more, litho printing is cheaper than output from a desktop printer/copier.
Faster output. A copier producing 60 each, 8.5 x 11-inch sheets (impressions) per minute is outputting about 3,600 impressions per hour (IPH)--60 x 60. Litho sheet-fed presses are much faster, producing 15,000 to above 100,000 IPH, depending on the press.
Volume sensitive. The more you buy, the cheaper it gets (on a per-piece basis). This is the result of the very high speeds at which litho presses run. Output from (much slower) copiers and desktop printers, by contrast, represents a higher fixed-cost per sheet. No matter how many copies you make (on a desktop printer, copier or fax), the cost (per copy) stays about the same.
To reduce costs without sacrificing quality, identify items currently outputted in quantities of 1,000 or more per year (where the copy stays the same from job to job), and convert those to litho printing. The costs savings are usually substantial: 40 to 70%, on average.
5. Audit vendor contracts. The potential audit list may include office products, office machine service agreements, office equipment supplies, fire extinguishers, burglar alarms, landscaping/inscaping, heating/air conditioning agreements, leases, air express, messenger/courier services, etc. If audit-prompted billing errors are unearthed:
Immediately demand a refund for the current year.
Audit the previous three years for even more potential refunds. It is a pretty good bet that if contract pricing was not honored during the past year, the same is probably true for previous years.
Demand that vendors abide by signed agreements…or else.
Conduct contract-compliance audits every year. Doing so can yield large (recoupable) bottom line results on the order of 25% or more.
Tod Snodgrass is a principal with Cost Reduction Consultants, 2464 Rue Le Charlene, Rancho Palos Verdes, CA 90275; 310-831-2770; costreductionconsultants@yahoo.com.
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