Managing costs are crucial to ensure a healthy, profitable business, but that isn’t necessarily the same as cutting costs. Cutting costs is easy, but doesn’t always serve strategic interests of the business, and is often even detrimental. Our philosophy is that companies perform best with an eye to optimizing costs – minimizing costs within the framework of what the company needs to ensure profitability today and growth tomorrow. That is why we seek to help our clients identify not only ways to reduce costs but to structure their costs in a manner that ensures the success of their business. As a sign of that commitment, our fees for this service are almost entirely performance-based, with remuneration based on project outcomes relative to pre-agreed KPIs.
Our approach to cost optimization involves both an analysis of the company’s finances and the way the company creates value. The former seeks inefficiencies in the way the company finances it operations and covers cost, while the latter seeks irrationalities in the work processes that create value and drive revenue.
Financial Analysis
Includes the following steps: Analyze cost structure; Analyze payment structure in relation to revenues, receivables collection and payables payment; Critically assess the reasonableness of all expenditures; Divide the entire company’s costs between fixed and variable expenditures and evaluate the structure based on the industry and company’s development; Develop specific recommendations for how to: extend the credit period; optimize the cost structure.
Process and Structure Analysis
Includes the following steps:Assess organizational structure to ensure that leaders have manageable and transparent spans and layers; Assess value creating activities and identify duplications and redundancies; Identify external benchmarks of healthy costs and performance; Redesign processes to streamline value creating activities; Analyze the underlying drivers of costs and identify potential efficiencies; Assess Contractor/Consultant/Agency costs and efficiency of use.