The time has come to look at indirect costs in detail
Successful back-office optimization requires added value analyses
Indirect costs have increased at many organizations in recent years. Companies know that they need to optimize not only manufacturing, but also back-office processes which are not easy to measure. Our experience from transformation projects shows that it is not unusual for back office employees to spend 40% of their working time on low value-added activities. How can companies unlock the potential for increasing company profit by measures in the back office that will bring higher added value?
We can find reserves of 1 to 3% of EBITDA in the back office.
What have we achieved with back-office transformation projects?
We found that employees of an energy company spent 30% of their working time on activities of low value to their business;
We achieved annual savings of 20% in the back office of a production company operating in mechanical engineering;
We proposed streamlining the management structure.
We increased the quality of back-office services at a construction company by eliminating duplicate activities and reducing controls;
We streamlined the meeting and reporting structure;
How to consider indirect costs at a company with more than 2,500 employees and turnover exceeding EUR 200 million
Meetings took up 32% of working time and more than 1 FTE was dedicated to reporting
How to make customer care processes at a well-established and growing company more efficient
Summary of all analysed areas
Details of the project:
2. Phase - Design (2 weeks)
- Strategic workshop with company management to determine the optimal state of processes
- Recommendations for implementation and setting priorities for the main focus
- Quantification of savings and added value
1. Phase - Analysis (4–6 weeks)
- Comparison of departments across companies and the sector;
- Management model analysis
- Analysis at activity and process level
3. Phase - Implementation – (4–8 months)
- Implementation plan
- Joint working groups and objectives
- Ongoing evaluation
- On-the-spot implementation support
- Evaluation and completion
References
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