In our recent study on Trends Impacting Operations in 2012, we discussed a key challenge facing many members today: continued year on year cost reduction. Despite the cuts made across financial services in recent years, over 60% of Operations executives are forced to reduce their budgets further in 2012. But while traditional budget reduction strategies often rely on evaluating costs to identify what can be cut or pared down, this generally does not bring sustainable cost reduction and it can end up hurting Operations.

Here’s why. First, forced budget streamlining can hamper investments that are important for efficiency or growth, causing firms to lose out on productivity and revenue. Second, by only focusing on visible budget line items, executives overlook the waste that is baked into Operations’ day-to-day work and procedures. Third, costs have a tendency to creep back in the long run as revenues rise, which means that efforts often don’t have lasting results. In order to achieve sustainable cost reduction, executives must look deeper to analyze the hidden sources of cost waste in Operations.

To help you with this, the Council has identified 22 key attributes of Operations’ “hidden inefficiency”–costs that often go unmeasured or undetected and can lead to significant amounts of cost waste. These attributes cover a wide range of inefficiencies – from employee performance standards, to manual steps and non-standard work, to sourcing. We’ve put these attributes into a diagnostic tool that can help you identify what is driving unnecessary expense in Operations. Additionally, a benchmarking assessment will evaluate your firm’s cost efficiency performance of against that of your industry peers.