How did telecoms giant BT turbocharge its profits by cracking down on costs? Arthur Yu has the answer.
All companies, big or small, should continuously assess their cost structures to ensure they deliver returns for shareholders and create a decent value proposition for customers. However, cost optimisation programmes, if not managed properly, can end up delivering short-term non-repeatable savings, while at the same time damaging a company’s customer services and innovation capability in the long term. As one of the founding members of the group cost transformation team, I was personally involved in many of the cost reducing initiatives launched. I would like to share some of my own reflections on the three key success factors of BT’s cost transformation (CT).
Based on our experience of cost assessment in BT Group, we believe a successful and sustainable CT programme needs to focus on reducing the cost of failures and not just cutting costs, building a strong internal capability to execute the transformation agenda, and establishing a strong programme governance framework to manage different initiatives, stakeholders and priorities.
This is an extract from the Business & Management Magazine, Issue 262, March 2018.