Cost Transformation is an absolute call to action
for organizations wanting to maximize business performance and be leaders in their industry.
As an enterprise grows and faces challenges created by marketplace disruptions, increasing client expectations, legacy platforms, or regulatory compliance requirements, “business as usual” is not a recipe for success. Instead, continuous evaluation of all the levers that impact financial performance — including the way costs are managed – will ensure financial success.
Embark on a Cost Transformation Journey
Traditional methods of cost management assign cost reduction targets by department, forcing each to manage within their silos by targeting low hanging fruit. While straightforward to implement, these are short-term, narrowly-focused approaches to cost management that are not sustainable over time.
The Northridge approach to improved business performance and cost management is to embark on a Cost Transformation Journey, with an outcome that re-configures a firm’s overall cost structure for the future. This approach enables a firm to recognize the factors that drive its end-to-end costs and aims to leverage critical changes in business processes to create a new, optimized cost profile with a transformative outcome.
Northridge Cost Transformation Solutions
Cost Transformation engagements are typically performed in phases with specific sets of outcomes and deliverables.
Establishing a Cost Baseline
This step in the journey creates visibility at a detailed, operational level to the correlation between work that is done and the resulting costs incurred. The baseline is created from an end-to-end process view, irrespective of departmental silos, and enables the organization to view costs as an equation of unit costs and volumes. Financial scenarios are then developed to establish “what if” scenarios.
Re-Shaping the Cost Curve
Changing the trajectory of the cost curve requires identifying opportunities for business transformation that will fundamentally alter the way work is performed and will substantially modify the work driver volumes. These business transformations look to the future state of business operations. Examples include:
Leveraging a Better Cost Structure
Cost Transformation demands a continuous evaluation of the business and financial performance. A cost culture creates a mindset that today’s financial results are not good enough for tomorrow’s competitive and ever-changing marketplace. Discipline driven through a governance and communication process, coupled with a management scorecard that drives insights for action and accountability for results, are critical success factors in building a cost culture.
Northridge’s Operational Excellence Solutions
At Northridge, we help our clients gain that competitive edge by driving change without falling behind or missing targets, all while delivering measurable results.