Effective cost optimization can ensure business survival and fund future growth. It should combine expertise from across an organization, including the finance, supply chain, IT, HR, operations, and customer functions, in order to deliver integrated solutions rather than siloed views.
Whether an organization is looking to ensure stability or outperform its competitors, it will require the right mix of intelligent cost-reduction, investment in key assets, and the development of new business opportunities.
There are many cost levers at a company’s disposal. Some provide short-term impact but may conflict with strategic goals, while others require long-term investment to be released. To create an optimal and sustainable cost position that is aligned with strategy and commensurate to capital investment, fairsystems supports its clients in taking a fresh look at their cost base and undertaking a comprehensive review of all possible levers, leveraging a broad toolset and deep functional experience.
Our philosophy is that you don’t need a lengthy and overly detailed, desktop-based diagnostic, but rather a rapidly developed, fit-for-purpose fact base that is leveraged to support a well-coordinated program of client-led initiatives.
Fact base development. We are able to help clients quickly create a single source of truth within a relatively short period of time. This normally involves:
- Cost segmentation by function;
- Segments decomposed, cost reduction levers identified;
- Cost reduction levers (or gap to ideal state) based on deep, sector-relevant functional experience.
Opportunity hunt. We leverage a broad productivity toolset to identify opportunities that we deploy as appropriate for each client situation, in order to develop an overall savings target that can be cascaded down into initiatives. This toolset includes:
- Spans and layers: Ensure that the breadth of reporting lines to the front line is appropriate;
- Value stream mapping/LEAN: Minimize duplication and ensure only “value” activities are undertaken;
- External benchmarking: Create a clear view of what “good” looks like;
- Process redesign: Eliminate redundancies and streamline processes;
- Cost/value driver trees: Decompose costs into their underlying drivers and address the drivers;
- Contractors assessment: Investigate the reliance on contractors and the efficiency of their use;
- Operating model: Redefine allocation of responsibilities and where work is done.
We are able to draw on our deep experience in organizational strategy to support our clients in configuring their businesses in a way that fully supports and unlocks the value of the most complex cost opportunities.