Large enterprises under shareholder scrutiny and mid-market companies financing growth via retained earnings or private equity funding have one agenda in common—optimizing the overall cost to run the business. Third-party spend can account for 30–70 percent of an organization’s cost structure. This means that its equally important to contain vendor spend as it is to manage retained costs.

AS-IS COSTS ASSESSMENT

Several organizations do not have a good grip on their true IT & Business Operations cost base, a situation that only gets exacerbated with acquisitions as costs get spread over multiple units in no clear, consistent, or centralized manner. Additionally, in-flight enterprise-wide transformation programs are seldom appropriately accounted, allocated, and forecasted.

We perform a comprehensive assessment of retained and third-party costs and catalog it accurately under Capital Expenditures and Operating Expenses and create a true-up Total Cost of Ownership Model for IT and Business Operations. As hands-on practitioners, we understand that such cost assessments may be based on multiple and fragmented data systems and therefore may warrant several iterations / validations in lockstep with the client.

Transparency into where purchasing dollars are being spent can unearth both optimization and resilience opportunities. Digital tools can help tame the long tail too.

SECURE OPTIMIZATED COST STRUCTURE

Often this first phase of cost true-up can uncover anywhere between 10 percent to 40 percent buried and unclassified costs. Once a true-up view of the client’s as-is retained and third-party costs has been firmed up, we proceed to benchmark each cost unit and build up optimization targets aggregated by categories, departments, subsidiaries, and/or third-party contracts.

Our early-stage benchmarking assessment ensures that our clients don’t walk blind into a bid process unlike a traditional approach. Our clients find this truly beneficial in managing internal expectations early-on in the process.

We commit to securing the identified opportunities by leading the RFP through to contract or Renegotiation process to secure a contemporary contract on flexible terms and/or managing the transition program, deploying ongoing third-party governance frameworks.