Setting clear and fair targets, and defining the initiatives required to meet them

There are many different drivers for organizations to chase greater efficiency – from poor financial results, to mergers or the entrance of new competitors challenging current position. Understanding the motivation behind an efficiency push is fundamental to setting the rules of the game, as the more critical the situation, the more aggressive targets should be and, by association, the higher the risk and disruptive tactics the organization will need to accept.

From our experience, the search for efficiency presents the same challenges across geographies and industries:

• Clarifying the ambition and purpose of the project for the business
• Setting a clear and appropriate reduction target based on the size of the gap and appetite for risk
• Ensuring leadership understanding, buy-in and alignment throughout the process
• Identifying efficiency initiatives beyond the status quo, and encouraging the organization to think differently
• Prioritizing initiatives and developing a feasible implementation plan
• Managing execution and financial timelines in a structured way, guaranteeing the involvement of key stakeholders and an effective decision-making process
• Communicating regularly to the team, balancing the need for transparency with the risk of inducing anxiety or creating gossip
• Constructing a clear implementation plan with governance to ensure delivery against fair KPIs

Efficiency and cost reduction projects require leadership to look at the business through a different lens, putting business needs above the interests of specific teams or functional areas. These initiatives require tough and unbiased decisions – so beyond the actions themselves, success depends on alignment between leadership on the company’s direction and goals, and commitment to follow through until financial targets have been reached.

We work together with you throughout, from target setting to full implementation of cost saving initiatives

We support our clients by providing a structured approach and an external perspective by:

• Assessing the current business strategy and performance against objectives
• Defining the appropriate level of aggressiveness to close gaps, and translating it into clear targets which make sense in the business context
• Bringing external best practices and facilitating internal workshops to map the actions which fit the needs and constraints of the organization
• Conducting numerical analysis to prove viability of ideas (business cases, volume driven analyses, out-sourcing or in-sourcing alternatives)
• Supporting the leadership team to make informed decisions on different risk scenarios
• Building feasible financial and implementation plans based on investment and resource availability
• Preparing and launching the governance to track execution and opportunity capture, supporting fast escalation of risks and issues, and enabling adjustments that keep the project on plan
• Implementing change management actions to minimize resistance and bring the team along, throughout the journey

Done well, efficiency and cost reduction projects can bring more benefits than just immediate financial gains, such as:

• Deeper understanding of different efficiency levers: wide map of potential initiatives to consider within the project, and in future projects, based on cross-industry references and data analysis
• Better alignment among leadership: ensuring connection to strategy, understanding of needs and building commitment to implement the changes
• More prepared team for execution: guaranteeing the team has the capabilities and tools to execute the planned changes effectively
• Higher progress tracking accuracy: objective measurement of project’s success against targets
• Longer term sustainable results generated: designing initiatives which improve ways of working and stick once the project is over
• Stronger culture of efficiency: embed a new way of thinking in the day-to-day of the business

Based on a practical and dynamic approach, our methodology ensures an implementation perspective and balances process diagnosis with deep numerical analyses

Our methodology is organized in four steps:

1. PREPARATION

Guarantee that the necessary data is organized and that leadership is aligned on the efficiency targets.

• We bring our experience to support the company’s leadership in defining a clear efficiency target, considering the business’s context and strategy
• Based on preliminary interviews with the leadership team, we also define the numerical baseline ($ and/or # headcount), which is fundamental for calculating potential savings without distortions
• We also assist the leadership to communicate the target and reason why, to all stakeholders

2. SCREENING & SAVING HYPOTHESIS

Map hypotheses exhaustively, balancing broad diagnosis with deep analysis of sensitive processes.

• We count on our professionals from Integration’s different practices and competence centers. This is central to facilitating our technical understanding of your company’s reality through interviews, processes mapping, data analysis and internal and external benchmarking.
• This step is crucial for ensuring adherence to your business reality with an implementation mindset throughout the project, both critical factors for achieving the desired results.
• From our experience, the biggest trap in a cost-efficiency project is trying to map conceptual opportunities with theoretical benchmarks and analysis. Being conceptual generates a high risk of mapping infeasible opportunities that do not have buy-in from the team.
• We therefore conduct a comprehensive diagnosis, typically divided in two main workstreams: headcount and expenses. These involve all the necessary professionals and process-oriented benchmarks to generate a map of hypotheses and their associated benefits and risks.
• Involving all necessary professionals at this stage increases the team’s empathy with the project and is the first step towards building the sense of ownership that is vital for ensuring that the project continues to be driven after Integration has left. We take special care in fostering this ownership in your team.
• This phase ends with a “Go / No Go” workshop with C-level professionals in which, supported by Integration, the leader of each area presents the mapped opportunities to the project committee and recommends how to proceed.

3. FUTURE MODEL DETAILING

Detail the future state, based on the direction from the “Go / No Go” workshop, together with the client team.

• Detail what is required to implement each of the approved initiatives, including the design of the future organizational structure, model, processes and systems.
• Here we ensure a pragmatic approach, identifying quick-win opportunities that do not need to be further detailed so they can move directly to the implementation phase whilst other initiatives are detailed.
• We also recommend the participation of senior team members to discuss corporate culture, restrictions and past experiences so that these can be considered when designing the details of the future model.

4. SAVINGS CAPTURE ROADMAP

Consolidate the plans for each initiative and assess interdependencies, prioritizations and overall feasibility to ensure the planned results are achieved

• Relying on our implementation expertise, we build the implementation roadmap together with your team. The roadmap includes a logical and organized strategy for how to tackle each initiative encompassing all the necessary steps, context, risks, resource capabilities, enablers and investment
• In an analogue structure, we also calculate a financial roadmap that shows when savings and investments will occur in from a P&L and also cash flow perspective
• An important activity is the definition of a leader for each initiative. We guarantee their onboarding, enabling them to lead the implementation and drive the initiative forward in the future.
• We also design and implement a governance model to provide visibility to leadership and ensure that the initiative leaders have the support they need after Integration leaves the project. The implementation and financial roadmaps are used by senior management, initiative leaders and the PMO to keep track of the project’s evolution and benefits (from cost savings to ROI)