When back-office costs spiral and services fail to deliver, the reflex is often to cut support services across the board. But our study of 37 companies in industries ranging from consumer products to financial services to energy shows that strategically trimming and reconfiguring support functions such as HR, finance, and procurement is smarter than making wholesale cuts. Done right, it can actually improve effectiveness as it reins in costs.
A version of this article appeared in the March 2007 issue of Harvard Business Review.
