Cost Optimization Services
An organisation faces various challenges due to globalisation, new technologies and industry disruptions. These challenges require businesses to streamline their operations, so that they can move ahead with a great efficiency and effectiveness towards achieving cost excellence. This is where business cost optimization services come in place.
Cost optimization for corporates is a business-centric approach of continuous discipline to regulate operational cost reduction and spending, along with maximising business value and profits.
Why do organisations need cost optimization?
Organisation requires cost optimization for various reasons. Some of the major aspects are as follows:
1-Minimising Risks: Any unnecessary risks of business should be avoided at all costs. To avoid any kind of unnecessary costs and mishaps, the organisation needs to plan for a secure risk-free environment. One of the ways to do that is by preparing a cost optimization strategy
2-Minimising Costs: Cost minimization is the way to decrease costs which may come with or include their share of risks to profit and workplace. These are all required to be covered within the aspects of cost optimization of every firm.
3-Maximising Business Value: The maximisation of business value makes your business stay one step ahead of the competition by reducing time to market & promoting innovation.
Together these aspects can comprise to help optimize costs of business.
Business Cost Optimization- Scope of Coverage:
- Evaluate liquidity & working capital requirements in order to preserve cash
- Assess continuity of ongoing contracts
- Optimize utilization of cash for payment of short-term & long-term liabilities
- Reviewing trend & pattern of transactions denoting cash inflows & outflows
2-Revisit Cost Incurrence:
- Determine the avoidable fixed costs
- Discover alternatives to more towards variable cost model
- Analyse Capex inefficiencies & deter Dapex Expenditure
- Optimize usage & disposal of asset
3-Viable Operating Model:
- Explore composition of lean teams for business sustainability
- Third-party evaluation to shift towards localization
- Identification of Cost Control Opportunities like: Arm’s length assessment- excess expense being charged by and paid to vendors
4-Re-define Business Blue Print:
- Re-define the terms & conditions of contracts
- Re-negotiate collection data with customers & payment date with vendors
- Re-assess the inventory requirement & revisit purchase orders
Types of Business Cost Optimization MBG works on:
1-Competitive & Strategic: Espionage, Bid rigging & manipulation
2-Operational: Misappropriation of Assets, scrap embezzlement
3-Legal & Compliance: Drafting deficiencies, version control, communication & retention
4-Financial & Credit: Unauthorised Credit, forged and fictitious expense claims, cash skimming, larceny and others
5-Macro & Intangibles: bribery & corruption, policy & influence, conflict of interest and office of profit
MBG’s Business Cost Optimization Services Include:
- Reporting of Cost Optimization Measures: In this step, various costs are reviewed as per the discussion/agreement with the Management. In the Reporting part, we inform the Management about the financial impact in terms of value, process, operations and alternatives. Recommendations were also provided considering the root cause of the anomalies.
- Drafting of Implementation plans incl. negotiation strategies with vendors: We also helps Organization in drafting of implementation plans for mitigation of risks associated with the Company. Documentation of negotiation Strategies with the Vendor play critical role at the implementation stage considering value involvement, transactions, size/criticality of vendor
- Identification of alternative vendors and suppliers having less cost exposures: Identification of alternative vendors is an important part of vendor management and performance optimization. It is crucial for the success of a business and helps in mitigating risks.
- Evaluation of Vendor Due Diligence, Negotiation Strategies & Documentation Review: Evaluation of Vendor Due Diligence, negotiation strategies and documentation review help in the costs reductions, realization of benefits and business risks mitigation.
Benefits of Cost Optimization Solutions:
- Maximising Business value
- Highlight Outline between Mandatory & Avoidable Business Spend
- Solicit favorable terms, conditions and pricing for business transactions
- Hedges concentrated transactions by exploring alternatives
- Business Centric Focus
- Re-visit the Cost Benefit Analysis
- Continuous discipline in monitoring propriety & cost management
- Rationalize Applications & Business Processes
Our Service Deck:- Business Cost Optimization