Category Archives: Cost management program
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How to prepare simple, effective cost management reports (part 2)
Posted on September 22, 2011 by hudgeon in Cost management program, Organisational change, TipThe Cost Reduction Tip Tip #21 provided an overview of the company we are looking to prepare cost management reports for. To summarise, ABC Services provide software and consulting in the facilities management sector have one office in Sydney and another in Melbourne the bulk of their revenue comes from the sale of asset management software [...]
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How to prepare simple, effective cost management reports (part 1)
Posted on September 14, 2011 by hudgeon in Cost management program, TipThe Cost Reduction Tip Effective management accounts are critical to a cost reduction initiative. Without it, your stakeholders can’t see that their pain is justified. It’s like the difference between running on a treadmill (without a watch or odometer) and running through the countryside. If you have a destination and can track your progress, your [...]
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Start by looking for game-changing opportunities
Posted on September 3, 2011 by hudgeon in Cost management program, ProcessesThe Cost Reduction Tip When looking at cost reduction opportunities in an area, you should start by assuming that you can remove 100% of the cost. If that’s not possible, then look at ways to remove 90% of the cost. If you don’t start ambitiously, you’ll miss some real plum cost reduction opportunities. Internal IT hardware [...]
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Commbank’s annual report reveals dramatic variability in operating efficiency
Posted on August 27, 2011 by hudgeon in Cost management program, TipThe Cost Reduction Tip Today’s tip isn’t really a tip so much as a mini-case study. Looking through Commbank’s annual report, I was struck first by the impressive 39% operating efficiency of their Retail Banking arm (typical financial services operating efficiency is around 45%) and second by the variability in operating efficiency across the business [...]
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End “administrative incoherence, blurred authorities and reluctance to accept managerial risk”
Posted on August 20, 2011 by hudgeon in Cost management program, TipThe Cost Reduction Tip Today’s tip is quote from a yet-to-be released report calling for dramatic cuts to the administrative overhead of the Canadian military. Today’s Globe and Mail has printed key parts of the 80 page report prepared by Lieutenant-General Andrew Leslie, Canadian Forces Chief of Transformation. The printed excerpts could serve as a blueprint [...]
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Fix core problems
Posted on August 13, 2011 by hudgeon in Cost management program, Organisational change, TipThe Cost Reduction Tip Some problems just need to be fixed, regardless of cost. Last year, near our apartment in South Delhi, maintenance workers spent more than two months resurfacing our road. Every fortnight thereafter (and possible continuing to this day), a sinkhole would appear in the road and a roadwork crew would come and [...]
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Keep your passengers informed
Posted on August 10, 2011 by hudgeon in Cost management program, TipThe Cost Reduction Tip Tom Bender from SpendCorp contributed today’s tip: It’s not enough to do good work, your stakeholders must see that you are doing good work: control, track and report.
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Substantiate irrationality
Posted on August 9, 2011 by hudgeon in Cost management program, TipThe Cost Reduction Tip I was speaking recently with Enrico Rizzon from AT Kearney and, as I’m inclined to do these days, I asked him for a cost reduction tip. He said “substantiate irrationality” and backed it up with a couple of anecdotes where being able to defend his cost reduction conclusions proved critical in getting [...]
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Create a high profile internal team to identify best practices and embed a cost conscious culture
Posted on August 8, 2011 by hudgeon in Cost management program, Organisational change, TipThe Cost Reduction Tip In this tip I discuss embedding a cost conscious culture where you have a number of comparable operating units. Examples include retail banks or multi-site operations such as a national insurance brokerages, consulting firms, law firms, or logistics providers. Where you have the multiple operating units, you have the opportunity to [...]
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Assign clear personal responsibility for each cost line to a single individual
Posted on August 5, 2011 by hudgeon in Cost management program, Organisational change, TipThe Cost Reduction Tip As I’ve planned my upcoming tips, I’ve been pondering which tip will be the most important. I now think this is it. You cannot reduce cost in your organisation unless you assign a single person the task of, and regularly hold them to account for, improving each cost line – and if [...]
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