Cost Reduction Analysis

Within most organizations, there are significant opportunities to reduce operating costs and layoffs are not always the most appropriate solution. Our extensive operating experience as owners of various businesses and as consultants to many others, has enabled us to effectively identify ways to reduce costs without impacting overall operating goals.

Our cost reduction services are based on the view that an organization is a living organism. Changing a single aspect within one department can have subtle consequences.

There are times when reducing the cost of one line-item can materially raise overall operating costs.

For example, one client took the advice of another consultant and built-out a call center to reduce the outsourcing fees. Within months, they realized the anticipated cost savings would never be achieved because they lacked the skills and experience to effectively manage a call center. As a result, the firm lost hundreds of customers, hundreds of thousands of dollars in revenue and profits and ultimately closed their call center and outsourced it again.

While often counter intuitive, there are times when increasing the cost of one line-item can materially reduce overall operating costs.

For example, one client engaged us as a consultant to facilitate a complex financial transaction unrelated to our cost reduction services. Our fees were entirely additive to their budgeted costs. It would have originally appeared that engaging our services would cost 15% to 20% more than planned. However, by the end of the project, our clients cash disbursements were as originally budgeted. So how did our services benefit them? We provided expert advise and handled the vast majority of the transaction on their behalf, without their senior management needing to spend the required time, effort or energy. As a result, the client was able to conduct 'business as usual' without the distraction of the financial transaction. The real savings? Hundreds of hours of managements time.

Cost cutting is not as simple as analyzing accounts payable to identify vendors who can be swapped out or renegotiated. As a result of the many complexities, we carefully research, analyze and evaluate cost reduction opportunities with a broad view of the overall operations; before making our recommendations.

Since we are paid a flat fee per project or a flat monthly fee to evaluate cost savings opportunities, our interests are completely aligned with those of our clients and help facilitate mutually beneficial and successful long-term relationships.