Potential Analysis Cost Reduction
Making cost saving potential of your company transparent
A cost reduction programme is often at the top of the priority list, but it also leads to a multitude of individual initiatives. We have created this checklist to complete our guide and help both business and procurement leaders identify the key elements throughout the process. This focus will play its part in ensuring solid outcomes with a clear P&L impact and an achievable implementation plan is agreed by all parts of the organisation.
Why Potential Analyses are Essential
- Does your management team understand why the reorganisation of procurement is taking place ‘right now’?
- Do you agree with your key sponsors on the objectives of the business case from the potential analysis?
- Do they understand the benefits they will gain from the potential analysis – clear, solid insights into the business case, implementation plan and ROI programme?
The Importance of Spending Transparency
- Has spend been categorised in an overall market-based structure to allow you to identify fragmentation of spend or drill down by category or business area?
- Is this spend tracked by the organisation and used to build business cases?
How to Identify Potential
- Does your team use fact-based analyses to make pragmatic assessments and identify potential?
- Do you have a clear list of key initiatives and a deep understanding of the uncertainties and dependencies?
- Do you have current, relevant benchmarks within and outside your organisation for key spend metrics and cost points?
- Have you reviewed your key contracts in high potential categories – including any changes?
- For recent projects, does your team have solid documentation that tells you what has been addressed and what is still open?
How a Plan is Created
- Do you have a documented initiative pipeline of all potential initiatives, setting out the order, timing and benefit realisation profiles?
- Does your pipeline include 3-8 key initiatives, each of which will generate significant savings for your organisation (i.e. over 0.25 – 0.5% of your total third party cost base)?
- Do you know the requirements needed to realise the key opportunities in this area?
- Have you targeted significant thresholds for core initiatives?
- Are you and your key stakeholders confident that you have the necessary resources to implement this plan?
- Can you summarise your pipeline in a way that provides clear deliverables and timeframes for implementation? Could your key stakeholders describe it?
Are You Ready for Change?
- Are you clear about the current capabilities and capacity of your function and where the gaps are to achieve the desired pipeline?
- Do you and your stakeholders agree on what additional elements are needed to realise the plan?
- Are your stakeholders willing to support these key initiatives and provide the necessary non-procurement resources?
- Is your organisation excited about this opportunity and confident in the plan?
Sind Sie bereit?
Wir sind hier, um zu helfen
Falls Sie sich tiefgreifender mit möglichen Lücken in der Planung von Kostenreduktionspotenzialen Ihres Unternehmens auseinandersetzen möchten, kontakieren Sie uns. Gerne unterstützen wir Sie bei der Implementierung dieses differenzierenden Modells und dabei, unternehmensweite Akzeptanz für Kostenreduktionen herzustellen.
