A collaborative approach to cost reduction generates better results

by Tim Dier

collaborative approach to cost reduction

The human plus machine solution to cost reduction

All firms, whether large or small, need to bring in expertise to help solve problems they face. External experts can provide objectivity and different perspectives, but there are many challenges involved. First, they must recognise that things are not perfect and need improvement, and this is easier said than done. Having accepted that outside expertise may be part of the solution, they need to frame the right terms of reference. They will then be faced with the time-consuming task of reviewing RFPs and running beauty parades to select a suitable partner.

A daunting process

Selecting the right business partner is just the start. Once the chosen consulting team walks through the door, the firm is faced with the vulnerability of sharing confidential information and the risk (either real or perceived) of ceding control over outcomes. Companies may be reluctant to spend limited resources on management consultants (both time and money), particularly if squeezed profits or performance are the reason for seeking outside help. It may feel like an extravagance.

Juniorisation

There is a risk that consultants do not provide the optimal solution. Large international consulting firms may provide off the shelf solutions that only deliver limited competitive advantage to the end client and that are insufficiently attuned to the client’s needs. Whilst the pitch and relationships are managed by polished senior partners, less experienced junior staff often end up carrying out the work. There is a danger that goal posts move, assignments balloon in size, and the client loses control.

The one size fits all dilemma

Can a data-driven and quantitative approach provide a high-quality solution?  The idea that off the shelf SaaS type offerings remove the need for genuine expertise may be misguided.

Lies, damned lies and statistics

Benjamin Disraeli

Interpreting data to draw the correct conclusions is challenging and difficult to apply in practice. SaaS tries to be all things to all people, but ends up pleasing nobody. This is a classic example of “the one size fits all solution” dilemma.

Human plus machine

The ultimate solution to deliver cost reduction and performance optimisation may lie somewhere in between these two approaches, using a combination of human plus machine. This is the OptimX philosophy. We bring together the best of both worlds; industry expertise combined with targeted data analytics, with the sole aim to curb unnecessary costs. We deliver targeted cost consultancy, but our clients retain control.

Partnership

We partner with our clients, listen, and achieve results together. We are discreet, objective and offer deep hands-on expertise, drawing from our in-house team and select industry experts. Our flexible approach offers maximum value for our clients, and most of our work is through referrals. We also recognise that solutions need to be dynamic and evolve over time. We build long-term relationships with our clients where we repeat, refine and continue to optimise.

Results speak for themselves

A recent assignment was a case in point. A corporate client had grown rapidly over the past few years, and with healthy revenues their focus on the cost side of their business had taken a back seat. They openly admitted that they did not have a good handle on what or where they were paying their service providers, particularly in the foreign exchange, money market deposits, and overdrafts, where costs are not always itemised out transparently.

Not wanting to be distracted from their core and successfully growing business, they engaged OptimX as an independent pair of eyes to review their expenses and on what terms they were taking place. In partnership with our client, we deployed our human plus machine model and identified several areas for material savings.

Our deep product expertise combined with targeted data analytics enabled us to rationalise their processes and renegotiate their terms to reflect their rapid growth and increased scale – directly boosting their bottom line. Measurable savings were achieved without any operational upheaval or new systems. At every stage the client retained control, and we helped deliver a more sustainable outcome for our client and their counterparties.

If your business could benefit from a no obligation consultation, we are here to help. You may be surprised how much you can save.