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 Cost Transformation

 Building a Better Cost Structure

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:

  • Technology Assessments: Examine the use of technology to strengthen digital capabilities such as customer self-service options.
  • Business Process Redesign: Simplify processes or eliminate work steps to reduce errors, re-work and manual intervention.

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.

Featured Blog Post

Northridge guides organizations through Cost Transformation Journeys to achieve financial goals and promote a forward-looking business perspective.

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Featured Case Study

Fortune 50 Enterprise Embarks on Cost Transformation Journey

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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.

Talk To Us About Your Organization

With experience across nearly every industry, non-profit, and governmental agency, we have the team to help you achieve your goals.

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