This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here: http://flevy.com/browse/business-document/Pricing-a-Consulting-Project-94 This presentation discusses the basic principles behind designing and pricing a management consulting type project.

1. Cost Reduction Presentation
This document discusses various cost reduction methodologies and concepts,
including the following: Process Optimization, Strategic Sourcing, Shared Services,
Business Process Outsourcing

2. 4
Use a Savings Prioritization Matrix to identify the most viable opportunities
and define priorities for analysis
Potential
Savings
Sources
Process
Optimization
– Resource and
Technology
Analysis
Strategic
Sourcing
– Vendor Analysis
– Supply Chain
Optimization
– Supplier
Relationship
Management
Shared Services
– Consolidation and
Streamlining
BPO
• High Technical
Complexity
• Multiple
Interdependencies
• Political issues
• “Emotional” Content
• Standard
Specifications
• Simple connections
• IT centric
• “Analytical” Content
HighLow
CostReduction
Opportunity/Benefit
Hard EasyEase of Implementation
Strategic
Sourcing
Project Portfolio
Rationalization
Operational
Automation
Application Portfolio
Rationalization
Head Count
Infratructure
Consolidation
Compensation
Cash Management
Application
Maintenance
Outsourcing
Consolidate
Help Desks
Procurement
Management
including
Contractor
Management
Shared
Services
Consolidate
Market Data
Offshore
Development
Data Center
Consolidation
IT Funding
Model/Charge Back
Prioritization Matrix
EXAMPLE
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3. 7
Agenda
Business Process Outsourcing
Shared Services
Strategic Sourcing
Process Optimization
Overview of Cost Reduction
This document is a partial preview. Full document download can be found on Flevy:
http://flevy.com/browse/document/cost-reduction-93

4. 10
Here is leading approach used for a typical Activity Based Assessment
65 9
Step 1 Step 2 Step 3
1
Pre-project
Planning and
Set-up
Initial
Diagnostics,
Interviews
and
Hypothesis
Data
Gathering
Leadership Performance
Quantification
and Validation
of
Opportunities
Path Forward/
Transformation
Map
Quick Wins for productivity
enhancement
Initiation of Change
Operating Model Analysis
• Cost Analysis
• Benchmarking
Organizational Model Assessment
2 3 4 7 8
Planning/
Alignment
Analysis of the “As Is”
and Potential of the “To Be”
Transformation
Map
11
Business Analysis through
Process Mapping
Opportunity Selection
Step 4
Planning Discovery Consensus Mobilization
10
EXAM
PLE
Long Term change requirements
This document is a partial preview. Full document download can be found on Flevy:
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5. 13
SKU
Management
Sales
Creative
Services
Consumer
Research
Marketing
Planning
Asset
Management
Acquisition
Acquisitions, Marketing & Sales
Promotions
Pre- Production
Management
Product
Planning
“Prod. Config”
Inventory
Planning Pre
release
Sourcing
Procurement
Bus. Decision
Framework
Collaborative
Forecasting
Data Integrity
Post Event
Analysis
Knowledge
Management
Budget / Planning Category
Management
Manufacturing Assembly
& Distribution Planning
WIP Inventory
Visibility
Demand &
Supply Matching
FG Inventory
Visibility
Manufacturing
Assembly &
Distribution
Pick, Pack &
Ship Planning
Planning
“Outbound”
Transformation
“Inbound”
Order
Management
Replenishment
VMI Deliveries
Non VMI
Deliveries
Customer
Service
Invoicing
VMI Retail
Merchandising
Returns
Management
Credit &
Deductions Mnmt
Manufacturing Distribution Merchandiser
Business Intelligence
Supply Chain
Illustrative Macro Process Overview
Media Advertising
& Publicity
Planning
= Indicative
Pain Points
Interviewing, benchmarking, and other techniques are used to identify bottom
up savings opportunities measured against your current state processes
This document is a partial preview. Full document download can be found on Flevy:
http://flevy.com/browse/document/cost-reduction-93

6. 16
Agenda
Business Process Outsourcing
Shared Services
Strategic Sourcing
Process Optimization
Overview of Cost Reduction
This document is a partial preview. Full document download can be found on Flevy:
http://flevy.com/browse/document/cost-reduction-93

7. 19
Below is a high level end-to-end sourcing methodology leveraging procurement
organization design and alignment
4 Phase Sourcing Methodology
Phase 1 Phase 4Phase 3Phase 2
Assessment
Snapshot
Spend
Analysis
Category
Sourcing
- Repeatable
- Specialty
Implementation
Organization
Data Analysis
Organization
Assessment
Organization
Evaluation and
Recommendations
Implementation
4 Step Procurement Organization Design & Alignment Methodology
This document is a partial preview. Full document download can be found on Flevy:
http://flevy.com/browse/document/cost-reduction-93

8. 22
Agenda
Business Process Outsourcing
Shared Services
Strategic Sourcing
Process Optimization
Overview of Cost Reduction
This document is a partial preview. Full document download can be found on Flevy:
http://flevy.com/browse/document/cost-reduction-93

9. 25
There are 3 key horizons of Shared Services development
Our blueprint begins with the engagement of leadership and key stakeholders to establish key decisions and solution
parameters
Breadth of Organization Involvement
Level
of
Detail
Executive
Alignment
Validation &
Buy In
Detail Design &
Implementation
Blueprint
Blueprint: Executive Alignment
Blueprint: Validation & Buy-In
Detail Design & Implementation
Key Executive Finance leadership evaluate solution
and implementation options in the context of
strategic objectives, resulting in key decisions and
parameters. Includes high level financial model,
and organization alignment plans.
Extended team (including Division/Business Unit
stakeholders) develops additional detail in the Service
Model, Organization Alignment, Business Case and
Implementation options, resulting in scenario selection
and validation. Includes alignment with other initiatives.
Design & Implementation team develops detailed design
for pilot business domains and processes, and manages
migration to the new Intelligent Leveraging service
model
Decisions and parameters are used by a broader team to develop additional
detail, validate the way forward, and achieve buy-in from key stakeholders
This document is a partial preview. Full document download can be found on Flevy:
http://flevy.com/browse/document/cost-reduction-93

10. 28
Vision &
Feasibility
Study
ProjectStart-up
Location
Study
Organisation
Review
Process
Review
System &
Technology
Review
Vision
Development
& Business
Case
Project Management
Future
State
Design
Organization
Design & HR
Strategy
Site Location
Visit &
Negotiation
Service
Definition
Process
Design
Technology
Design &
Acquisition
Project
Management
Implementation
Implementation
Performance
Management
Program Management
SSC Build
Out
Baselining &
SLA
Resourcing
&
Redundancy
Knowledge
Transfer
Site
Migration
Planning &
Roll-out
SSC Service
Management
Role
Definition &
Headcount
Plan
Process Re-
engineering
System
Testing
Technical
Implemen-
tation
Process Stream Location Stream
PM
Stream
Technical
Stream
Performance
Management
Stream
Organization &
People Stream
Based on a Phase 1 specific to Shared Services, we can make informed decisions
around future state design and implementation
PHASE I PHASE II PHASE III
This document is a partial preview. Full document download can be found on Flevy:
http://flevy.com/browse/document/cost-reduction-93

11. 31
Providers will understand how to more efficiently and effectively contract
for deals that are sustainable, evolve over time, and cost effective
Dramatic Cost
Reduction
• Deploy technology enablers (Work Management, Scanning)
• Standardization
• Offshore/distributed delivery
• Implement best practice process methodologies
Business
Flexibility
• Rapid ability to scale business model up or down
• Deploy mature Change Management process
• Access network of global BPO service delivery centers
• Multi-platform, multi-client capabilities
Managed Risk
Exposure
• Achieve SAS70 controls audit and report
• Provide Sarbanes-Oxley compliance support
• Implement Key Performance Metrics
• Multiple BPO centers in diverse geographic regions
Operational
Excellence
• Implement best practice process methodologies
• Technology enhancement and enablement
• High quality staff focused on continuous improvement
• Deploy transition and transformation methodologies
VALUE ACHIEVED
The result is greater business optimization and flexibility through coherent control of activities that
have previously been loosely linked.
This document is a partial preview. Full document download can be found on Flevy:
http://flevy.com/browse/document/cost-reduction-93

12. 1
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