'Lights on' costs refer to the day-to-day operational costs that a business incurs. Examples include rent, utilities, salaries, and maintenance costs. These costs can be optimized by implementing cost-efficient strategies such as negotiating better contracts, reducing energy consumption, automating processes, and outsourcing non-core activities. It's also beneficial to benchmark these costs against industry standards to identify areas for improvement.

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The Cost Optimization presentation can help in identifying high impact areas for cost reduction by providing a structured approach to categorize costs. It helps in identifying costs that are not required and can be eliminated, differentiating capabilities that provide a competitive advantage, day-to-day operational costs, and unavoidable costs. By understanding these categories, organizations can prioritize cost reduction initiatives that will bring the greatest reward with the least impact to business efficiency.

'Best in class cost level' in terms of 'Can't avoid' costs refers to the optimal level of unavoidable costs that a business should aim for. These are costs that are necessary for the operation of the business, such as rent, utilities, and salaries. The 'best in class' level would be the lowest amount that successful companies in the same industry are able to maintain for these types of costs, while still effectively running their business.

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Cost Optimization

Want to identify the most high impact areas to save costs across your organization? Use our Cost Opt...

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