Re-engineer your company's cost base

Folio: The Magazine for Magazine Management, June, 1998 by Barbara Love

"We have to think differently about costs," says Tom Kemp, chairman and CEO, Penton Publishing. "We have to concentrate on what's most important to customers--editorial quality, circulation quality, customer service. Customers don't give a damn how much we spend on our offices, on sales and marketing, on T&E or corporate overhead.

None of that adds value for them." What we as publishers must do is look for ways to radically lower the cost base of our businesses, Kemp told colleagues attending the [M.sup.2] International Magazine Management Executive Forum. "We have to do the same thing our customers do--provide greater customer value, greater performance and lower prices, and at the same time increase profits. We need to look for opportunities to outsource functions or entire departments. We need to increase productivity. We need to centralize overlapping services where we can, or, if that doesn't make sense, to decentralize." Technology will be the key to re-engineering our companies, Kemp explained. But he warned publishers not to give the information technology department a blank check. You will have to negotiate and strike a balance between what they want and what you think is appropriate. You'll end up spending more than you'd like to, but less than your IT person wants, he said. But over time, "you really will change the way you do business."