Optimal operating costs – any Solution for business today?

Operating costs is an important factors that need to be managed effectively to ensure the stable and sustainable development of the enterprise. Optimal operating costs not only help businesses gain control over the budget that trigger enhanced business profits for the organization. The same Lac Viet Computing tìm hiểu chi tiết về các giải pháp tối ưu chi phí nổi bật trong hoạt động operation management cho doanh nghiệp năm 2024.

1. Understand the operating costs of a business

1.1 operating Cost is what?

Operating costs includes all expenditures necessary to maintain the daily operations of a business. This can be the cost for personnel, equipment, raw materials and many other factors ensure that the business can operate continuously.

Manage cost efficiency not only saves enterprises but also create competitive advantage in the market. According to the survey “Management Tools & Trends 2023“ of Bain & Company in the year 2023 on tools and trends, and management, 79% of global management said they felt satisfied with the ability to manage the cost of his company, 62% intend to make cuts costs significantly in this year to cope with economic fluctuations. Điều này cho thấy rằng việc kiểm soát chi phí vận hành không chỉ là biện pháp tạm thời, mà còn là yếu tố chiến lược giúp cost optimization in business để duy trì và phát triển​ bền vững.

1.2 How to calculate operating costs

How to calculate operating costs can be complex depending on the size and field of activity of the enterprise. However, there are a number of ways universal, such as:

• Calculate fixed costs and variable costs: fixed Costs are those costs do not change according to the level of production or sales, such as rent, office or staff salaries fixed. Variable costs are the costs change as the level of activity of the business, as the cost of raw materials or energy.
• Ratio analysis costs: Businesses can determine the ratio of operating costs, compared with the revenue to assess the performance and looking for opportunities for improvement.

2. The types of costs to operate a business

Operating costs include what? Every business will have the account operating costs, be different, be divided into fixed costs and variable costs.

2.1 fixed Costs

Operating cost is fixed costs do not change, regardless of the level of activity of the enterprise. Here are some examples of fixed costs:

• Office rent: Is spending mandatory business pay monthly.
• Staff salaries fixed: The employees work full-time often receive fixed wages, does not depend on sales or production volume of the business.
• The cost of insurance and taxes: The cost, this includes health insurance, social insurance, corporate tax, as the cost required no change in revenue.
• Costs asset depreciation: depreciation is the cost related to the use of the fixed assets of the business such as machinery, equipment or means of transport. This is expenditures estimated in advance and does not change throughout the duration of use of property.

2.2 variable Costs

Variable costs are the costs vary depending on the level of activity of the enterprise. These costs increase or decrease based on the scale of production or sales:

• The cost of raw material: As production increases, the demand for raw materials also increases, which leads to this cost varies with output.
• Energy costs: manufacturing enterprises often have the cost of electricity, water change, depending on the level of operation of machinery and equipment.
• Shipping costs: costs arising from the shipping of goods may increase or decrease based on the number of goods that need shipping.
• Labor cost variation: In some industries, the business can hire temporary employees or employees who work by the hour to meet the demand spike in production or sales. The cost for the employee, this will change based on the volume of work.

3. How to optimize operating costs business?

3.1 Cut the unnecessary cost

One of the simplest ways to optimize operating costs business is to re-evaluate and remove the account details is not necessary. Business can perform the following measures:

• Periodic review: periodic inspection expenses to the cost of no longer fit the current needs of the business.
• Renegotiation of contracts: renegotiation of contracts with suppliers and partners to reduce the cost or change the terms towards more profitable.
• Cut the unnecessary service: remove or reduce the scale and amenities that the business doesn't use effective or not bring great value.

3.2 automation business with technology

Automate business processes become a significant factor helps enterprises optimize operating costs. The use of modern technologies not only reduce personnel costs but also increase accuracy, improve work performance.

Một trong những giải pháp nổi bật là phần mềm quản lý quy trình LV-DX Dynamic Workflow. Phần mềm này cho phép business automation như quy trình nội bộ, từ kế toán, nhân sự,… LV-DX Dynamic Workflow giúp doanh nghiệp tiết kiệm thời gian, giảm thiểu sai sót do con người gây ra, đảm bảo quy trình diễn ra liên tục, thông suốt.

Besides, LV-DX Dynamic Workflow integration of technology artificial intelligence AI to analyze data, forecast, trend, automatically making a decision. This helps business to quickly adapt to the change of the market, to optimize the operation without manual intervention.

>>> Watch details: 5 apps AI in the enterprise to operate every process management

3.3 Apply the working pattern modern

Áp dụng các mô hình làm việc hiện đại như remote work và hybrid (kết hợp giữa làm việc tại văn phòng và từ xa) là một trong những cách hiệu quả để doanh nghiệp tối ưu hóa chi phí vận hành.

According to a report from Milken Instituterate work from far in the U.s. has reached 28,6% in January 6/2024, down from a high level point 61,5% in march 5/2020, but still shows the sustainability of this model after the pandemic.

Hybrid working combination of working at the office and remotely, is many businesses adopt in order to maintain the balance between work efficiency as well as the satisfaction of employees.

To support the applied working pattern modern software, LV-DX Collaboration of Lac Viet is a solution ably. LV-DX Collaboration provides a working space where employees can connect, collaborate and manage work from any where. This not only helps to maintain the alignment in business but also performance optimization work, at the same time minimize the costs related to the office.

3.4 Measuring performance to improve

Performance measurement is the key element to help businesses continuously improve and optimize cost. Businesses need to establish specific indicators to monitor operational efficiency:

• Use the software manage performance: Apply software tools help monitor, analyze the performance of each department in the business.
• Data analysis: Using data to identify weaknesses in operational processes, from which proposes measures to improve.
• Continuous optimization: Always review, update strategy to optimize costs to ensure the business operates efficiently as possible.

4. Trend number conversion to the optimal cost is many businesses apply

Convert numbers no longer is the option that has become mandatory requirements for businesses in the era of technology 4.0. The government is actively promoting convert numbers in all sectors to enhance competitiveness of countries.

Convert numbers brings several clear benefits for business, especially in the optimal operating costs:

• Process automation: Thanks to digital technology, complex process can be automated, reducing the human intervention, reducing costs related to personnel.
• Reduce the cost management: The management system business based on the foundation of providing analytical tools, detailed reports to business decisions quickly, the more accurate.
• Resource optimization: digital technology, helping businesses manage, and use resources more efficiently.

Lac Viet brings solution converter of comprehensivedesigned to support the business in all aspects of operations and management. This ecosystem is optimized for ease of use, reasonable cost, rapid deployment according to the specific needs of the business.

The solution, LV-DX includes many features enterprise management, financial, hr and customer. The software as LV-DX CRM (customer management), LV-DX Accounting manager (accounting and finance), LV-DX People (human resources management) to help businesses automate processes, optimize resources, save operating costs.

Optimal operating costs is a core element to help businesses maintain a competitive and sustainable growth. By understanding the effect of the type of cost, applied technology, using working models, modern businesses don't just save budget but also enhance performance.