The document outlines a webinar focused on the distinction between cost-cutting and cost optimization, emphasizing the importance of long-term growth strategies during crises. Key presenters from Symptai Consulting discuss how businesses can drive value through continuous cost optimization efforts while utilizing tools like digital transformation and data analytics. It also includes practical approaches for identifying areas for concern in business expenditures and maximizing operational efficiency.

1. WhyCostOptimizationistheWayoftheFuture
June 5, 2020

2. Overview
 Webinar Objective: Today we want to discuss the
differences between cost-cutting and cost optimization
and why we should be looking to make decisions for
long term growth even in a time of crisis

3. The
Presenters
 Korah Jane Jude
Korah Jane Jude is the Business Development Manager at
Symptai Consulting with over 15 years of experience in
business strategy, consultative sales, operational execution and
project coordination.
 Alicia Perez
Alicia Perez is the Director of IT Audit & Digital Transformation
at Symptai Consulting with over 15 years of experience in
Business Assurance, IT Audit, Advisory, Enterprise Information
Management and Governance.
 Alka Jain
Alka Jain is the Director of Business Assurance at Symptai
Consulting with over 20 years of experience in Information
Technology, Accounting and Management across varied sectors
including government, financial, utilities, retail, and
distribution.

4. Key Concepts

5. Creating Value
 Value - the regard that something is held to deserve;
the importance, worth, or usefulness of something.
 Cost – an amount that has to be paid or spent to buy or
obtain something
 www.dictionary.com
 Business 101
• Cost > Value = Business Fails
• Cost = Value = Opportunity for Shifts
• Cost < Value = Business Succeeds
When macro conditions
negatively impact value - cost
reduction becomes focal:
Cost Cutting - immediate,
direct one-time actions aimed
at reducing corporate expense
levels.
Cost Optimization –
continuous effort, specifically
designed to drive spending
and cost reduction while
maximizing business value.

6. ValueDriverTrees
Profit
Revenu
e
Cost
Price
Quantity
Cost
Drivers
Direct labor hours
Sq. Ft. Occupied
Downtime
Drivers
Economies of Scale
People
Pricing Strategy
Quantity

7. CostOptimization
 Key Driver: Truly See the Business (Data Analytics & Visualization)
Digital Transformation / Supply Chain Optimization
• Affordability
• Convenience
• Effective (true customer obsession)
Technical Capabilities (ex. Cloud)
• True variable cost
• Scalability
• Leverage economies of scale
• Focusing on business core strength
Outsourcing
• Resource optimization by focusing on core
strengths
• Higher return on incurred costs
Levers
Commitment to Win
• Ability to execute on the hard decisions to
make your business viable

8. Questions?

9. A Practical Approach

10. Identifyareasof
concernand
contributingparties
Profit & Loss Statement (USD) 2020 ('000)
JAN FEB MAR
Revenue Stream 1 1,000 1,200 900
Revenue Stream 2 500 600 700
Income 1,500 1,800 1,600
Cost of Goods Sold 500 600 450
Gross Profit 1,000 1,200 1,150
Expenses
Advertising & Promotion 50 60 90
Depreciation 10 12 15
Insurance 5 6 7
Maintenance 70 120 80
Office Supplies 40 35 45
Rent 15 15 15
Salaries, benefits & Wages 200 220 210
Telecommunications 10 12 13
Travel 90 50 80
Utilities 20 25 27
Other Expenses 5 4 6
Total Expenses 515 559 588
Earnings Before Interest & Taxes 485 641 562
Interest Expense 4 6 3
Earnings Before Taxes 481 635 559
Income Taxes 25 38 32
Net Income 456 597 527

11. Ask Questions
Are expenses aligned with
strategy?
Are business processes
efficient?
Is business value being
maximized?

12. Choosea
businessmodel
thatworksfor
you
Information
Technology
Value Maximization
- Unused user
licenses
- On premises vs
Cloud solutions
Manufacturing
Standardization
- Simplify processes
- Eliminate wastage
Business
Development
Growth
- Innovative
Products
- New Markets
Services
Automation
- Efficiency
- Lower cost
No one fix it all solution - the approach
can vary within the organization.

13. Questions?