Cost Optimization by World-Class Performers
The Hackett Group®, a leading global strategy and operations consulting firm, has found in recent research that world-class companies – defined as those that rank in the top quartile in operational efficiency and effectiveness – are substantially more successful at cost optimization than typical companies, and the gap in cost optimization between world-class performance and typical performance is growing. Examples of recent research findings from The Hackett Group on the issue of cost optimization include:
- World-class performers achieve overall back-office cost optimization that enables them to spend 24% less on total back-office costs than their average performing peers. For a typical Global 1000 company this translates to more than $230 million annual savings if it could apply the cost optimization strategies and tactics of world-class performers.
- In terms of specific functional areas, world-class organizations have applied cost optimization practices that result in savings of 47% on finance costs, 29% on procurement administration, 22% on human resources administration, and 12% on IT when compared to average-performing companies.
- During the recession, world-class performers implemented cost optimization measures that are more likely to be sustainable during recovery and growth than the cost optimization measures executed by average performers.
The Hackett Group delivers proven, measurable cost optimization
The Hackett Group offers strategy consulting and operations consulting services that drive measurable cost optimization gains for our clients. Our cost optimization guidance is backed by our world-leading benchmarking and business best practices database. This comprehensive business data repository, derived from the more than 25,000 benchmarking engagements that we have completed with nearly 8,800 major companies around the globe, gives The Hackett Group and our clients unparalleled fact-based insight into the strategic and tactical drivers of world-class performance. Drawing from this intellectual capital and from our wealth of hands-on experience, The Hackett Group can help your organization with all facets of cost optimization including:
- Definition of process metrics, including finance, HR, and IT metrics, to help gauge your current operational performance and to measure your progress.
- Benchmarking of your current performance in comparison to that of world-class organizations, in order to identify key performance gaps and to prioritize near-term and long-term areas for improvement.
- Development of an optimized service delivery model, with careful consideration of sourcing options including shared services, outsourcing, and offshoring.
- Business process engineering, including selection and implementation of proven best practices to drive cost optimization within each back-office function.
To learn more about The Hackett Group’s cost optimization solutions, as well as our full range of services such as advisory programs, business transformation consulting, and consulting for function-specific needs like cash flow management, supply chain optimization and more, contact us.