There are very few businesses, departments or functions where ‘cost’ is not a concern.
Cost is not only a question of the total amount of expenditure, be it on staff or services, but also on the exact nature and focus of that spend.
Cash can be a challenge both in the ‘up’ and ‘down’ of the economic cycle. As growth in a market or economy starts to emerge, cash is required to fuel the investments in marketing, sales and R&D efforts to capture and ride that growth curve. When times are tough and margins are squeezed, organisations must rein in spending, cut budgets and conserve cash.
In both of these cycles, it is important to ensure that you are spending your cash on the essential items and focusing your available reserves on priority items that allow you to compete and deliver your mandate in the most effective way.
Our approach to cost reduction focuses on your business priorities – we call it ‘Priority Based Budgeting’.
At SmartChain, we adopt this proven methodology and approach to help business leaders evaluate their options and make the difficult decisions.
Our approach will help you:
- Identify core versus discretionary services that a function should provide
- Analyse the execution of core services and map efficient resource requirements against them
- Decide on the discretionary services that should be offered, if any, and agree what resource will be allocated to them
- Develop a transition plan per department to attain the agreed service portfolio and cost level
Our teams have the breadth of experience to help your management team prioritise activities according to their impact on performance, decide affordable spend levels for each function and make the difficult decisions on where funding is distributed.
Our success rate with this approach has typically seen 10-15% savings year on year and most, if not all savings have been achieved within a period of 12 months.