The strategic advantage of cost takeout consulting for sustainable business growth

A cost takeout strategy focuses on identifying and eliminating unnecessary expenses to improve an organization’s profitability. As opposed to cost reduction, which is a short-term activity, cost takeout occurs over multiple phases, which often involves major changes throughout the entire process to reduce costs permanently, and stabilize the business performance regardless of the market conditions. It involves. It involves streamlining processes to eliminate inefficiencies, supplier management, budgeting and forecasting, among others. Cost takeout consulting services can help a business reduce costs by re-evaluating demand, identifying opportunities to save, and improving financial standing.  

The consultants compare the organization’s performance and costs against the industry standards, and identify gaps and opportunities for improvement. Group50 cost takeout consulting makes use of proven methodologies that are based on a holistic assessment of the business model using business hierarchy as a guide. This includes a deep dive into how technology is utilized and its cost to the business. Group50’s cost takeout consulting methodology follows three steps viz.   

Dividing the business up into its key service, product, and process elements and evaluating the cost-effectiveness of each element via financial performance benchmarks and process analysis.  

Looking at each element from the point of view of over 125 primary cost drivers.  

Identifying the minimum cost to operate these elements and building upon that cost structure to support the business’s strategic needs.  

  

Business Hierarchy of Needs® as a Guide  

Upon completion of the analysis, the consultants make recommendations and create a cost takeout roadmap to begin with, and make decisions about the acceptability of various impacts to internal and external customers. Once these decisions are made, the change management strategy is critical to the success of the implementation.  In all of our cost takeout work, we use the Business Hierarchy of Needs® as a guide. Business Hierarchy of Needs® is a change management framework by Group50 cost takeout consulting which consists of three levels of activities that make up an effective change management process for creating strategy, optimizing the organization and implementing change.    

  

The first level of Business Hierarchy of Needs® identifies the information required to fully understand the current state and to lay the foundation for building clearly defined strategies that achieve a defined future state. The second level of the Business Hierarchy of Needs® works on the organization’s cascading objectives, and addresses issues related to operating and strategic gaps. The third level is all about implementation, and involves setting up a steering committee, project charters, development programs, etc.     

  

Key components of Group50’s cost takeout consulting services are:  

Business Strategy – Clearly articulating the future state of the business. 

Senior Leadership – Leading the charge with clear goals, objectives, and communications.  

Alignment – Making sure that every functional organization understands its role in implementing the changes and how their effectiveness will be measured.  

Integration – Defining the changes in business processes, digital/IT systems, product portfolios, service catalogues, etc. that are required to support the cost take out roadmap.  

Execution – Creating the right project management structure and reporting mechanisms to assure implementation success.  

  

Group50 consulting firm has helped many businesses who have hit an inflection point with its cost takeout consulting, and implemented a series of new technologies that saved them significantly, even millions in operating costs each year. A full cost takeout activity was done on a $210M division of a multi-billion consumer product company by Group50 cost takeout consulting wherein the consultants redesigned critical business products, relaunched ERP from batch processing to flow manufacturing, and realized a $30M operating profit improvement.  Contact Group50 to have a customized cost takeout strategy for your business and make it more profitable.