many large corporates are since the beginning of Covid-19 in great financial trouble. One of the manin problems they face is that their organisational costs are much too high. But what are ‘organisational costs’ actually?
Organisational costs are the costs or expenses of creating a company and running a company measured in money, time and energy.
Many corporates are used to be able to charge out all their costs including organisational costs in terms of money, time and energy to their customers.
Managing, coordinating and collaborating internally and externally cost money, time and energy.
There are actually two types of costs looking at it from a revenue model perspective:
Necessary costs and unnecessary costs. A great example of that last category is the possession during Covid-19 of physical assets like expensive office space in the centre of very expensive towns. Many corporates discovered that everybodey could actuaally work and collaborate very well working from home and using tools like Zoom, Skype and Teams.
Something many startups, scale-ups and other new companies using the virtual organisation as a basic organisational design, already discovered a long time ago. And that is why they have much lower organisational costs and that explains why they are much faster than large traditional organisations.
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If you have any question or request on how you can use ICT to lower your organisational costs using ICT, how to define the best corporate survival strategy for your company and how to redesign your corporate company using ICT fast, please do not hesitate to call me on Skype on tony.de.bree, on 0031634387806 or email me here.
Tony de Bree
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