In a way, we’re all startups again thanks to the pandemic. We’re all looking for ways to run as lean as possible. Businesses with significant fixed costs (such as rent or overhead) or with only one sales channel (i.e., in-store) have felt the strain. We’ll talk about ways to diversify sales in another article, but for now we’ll share three cost reduction strategies for staying lean and mean through COVID-19.
Working from home used to be a perk that employers had to provide to attract talent. Now it’s a critical way to reduce fixed overhead.
Remote-first is cheaper for businesses. It’s an essential cost-reduction strategy that will shrink your business’s physical footprint—this means smaller offices, lower rent, lower utilities, and possibly lower liability-insurance premiums.
People are as productive. Ask anyone whose job has successfully transitioned to remote-first—they’ll tell you they’re just as busy as before, if not busier. With remote-first, conversations stay focused on work. Distractions are reduced. And people with long commutes love not going into the office.
Going completely remote may not work for every business. There are, however, some functions that can enjoy being remote-first. Here are a few examples:
Shifting even some of these roles remotely creates an opportunity to cut business costs by trimming fixed expenses. You’ll have to ensure these people are introverts who enjoy working by themselves. As well, having access to the right technology to enable this transition is crucial.
Here’s what you’ll need to successfully go remote-first:
There is also a cultural element here that we can’t ignore: Junior hires and extroverts tend to suffer in a remote-first model. Extroverts will lose the ability to walk over to someone’s desk with a question, and Juniors may struggle to know what to work on without direct oversight. Going remote may work better for senior-level hires who are comfortable working independently.
We’ve all heard of “Fractional” resources, such as a Fractional CFO. These are different from “Interim” roles. An Interim CFO comes in for a fixed period of time (say, six months) to help set up processes and then hires-in a replacement before moving on to the next company. Fractional, however, is more like a time-share. Fractional roles help to maintain and expand upon existing processes, and there’s no fixed project length. Hiring for fractional roles is not only an effective cost-reduction strategy, but also includes the following benefits:
Access to senior talent. Fractional heads must be senior and experienced. Why? Because they’re balancing multiple clients at once, and they don’t have the luxury of learning how to do the job. They need to provide the benefits of their experience to you and do it efficiently enough that it doesn’t impact their other clients. This typically means people in fractional positions have solved a greater diversity of problems. You can benefit from this.
Flexible budget with no commitment. Depending on your needs, fractional roles are budgeted on a capped, hourly basis. This means you don’t have to worry about the minimum carrying cost of a headcount. In many cases, you can leverage a fraction of a head (hence the term “fractional”). And ultimately, if it’s not working out with a specific resource, there’s no cost to exit. It’s simply one more way to reduce costs and run lean.
Whole departments can be fractional. This means you could “time-share” a multimillion-dollar department for as little as 10%–20% of the cost of going in-house. No need to worry about management expenses, training, retraining, performance coaching, raises, bonuses, benefits, vacations, redundancies, and so on.
TypeSift helps companies go completely fractional on data engineering needs. Book a discovery call with our experts to see where you can include fractional roles in your company and start running more lean today.
Remember, not all functions can be fractional. Roles that easily transfer between industries—such as those in Finance, HR, IT, and parts of Analytics—do better with the fractional model. As soon as you need a bespoke solution, going fractional won’t work. The purpose of fractional roles is to reduce overall business costs by minimizing expenses on things your company doesn’t specialize in.
Market Networks are a relatively new concept, but we believe these will start to see more popularity due to COVID-19. A Market Network is a three-way combination of marketplace, social network, and Software as a Service (SaaS) technology.
Marketplace. The marketplace allows you to find talent specific to a certain function (e.g., Finance, IT, or in TypeSift’s case, Data Engineering). It’s far more focused than a platform such as, say, UpWork, which hosts a random mix of freelancers.
Social Network. The professionals and companies on the marketplace will depend heavily on their reputation. Crafting and maintaining a positive professional reputation comes from a combination of many things, like customer reviews, how recent their certifications are, and a number of Service Level Agreement (SLA) violations.
SaaS Platform. At the heart of the Market Network is a tech platform that not only connects clients to verified talent but also goes further by fostering efficient workflow for complex projects.
Let’s take TypeSift as an example. Under the Traditional Approach to data engineering, companies are on their own: They hire an in-house Business Intelligence department. They buy several data tools. And they integrate the entire infrastructure themselves to enable reporting, analytics, and planning.
TypeSift takes a Minimalist Approach to data engineering. We provide a single, streamlined system that unifies the entire stack of tools into one product. We drive automation and workflow efficiency across the whole process. Then we work to connect clients with highly-vetted, outsourced, fractional talent to maintain and expand their infrastructure.
Interested? Sign up here for our webinars to learn how to your company can adopt a Minimalist Approach.
Market Networks combine the remote-first and time-share models with a tech platform at the center. With this lean approach, you can time-share a multimillion-dollar team while enjoying a much smaller fixed footprint. On top of that, you have a single, automated platform without the hassle of integrating many tools.
Market Networks are still fairly nascent, but many are predicting they’ll reach maturity over the next ten years. So, while remote and fractional teams can lead to lower fixed overhead and more flexible budgets, the huge value comes from combining the two. And if you can find a platform like TypeSift that enables it all, so much the better.
Leave the data engineering to us so you can get back to focusing on your company’s core expertise. We will help you transition your analytics and data engineering to a fractional, remote-first model. Book a discovery call today to learn more.
TypeSift is a Data Engineering & Design Minimalism Firm. Our expertise is decluttering information and solving problems in your data that are hindering your growth. We build software that corrals data and invokes ingenuity with the fewest moving parts.