How much time could you devote to overhauling expenses? If you suspected that store maintenance costs were out of line or invoice processing was too slow, could you spend 30 percent of your day trying to find out why?
It’s frustrating to know there are savings to be captured that you don’t have the time to go after. Results that are impactful and sustainable require a comprehensive, in-depth analysis which means diverting resources and time that you just don’t have.
Yet it’s precisely this type of analysis that can save your company hundreds of thousands of dollars. That’s where Cost Champions come in.
What is a Cost Champion?
These are employees who currently work within the company and are already known for their energetic, professional approach. They are smart, interact well with others, and care about their work. These men and women become your Cost Champions, and they can change your business!
These employees are living day to day with the inefficiencies that have slowly crept into the business. They know how the business ticks, and you’ll be amazed at the ideas they already have on how to make things more efficient and cost effective. These designated Cost Champions are passionate about reducing costs and when provided with the knowledge and tools necessary to properly dissect and analyze costs, this becomes a dynamite combination!
Powerful Benefits of the Cost Champion
1) Cost Champions are motivated to do it right. They have a significant stake in the outcome because they have to live with the changes.
2) Success is increased since the people that drive the implementation are the same people that are there to sustain the process.
3) Changes are implemented more effectively and with less resistance when proposed by co-workers rather than outside consultants.
4) A new culture of effective cost management is instilled in the organization because your people have been taught the skills of cost reduction (as opposed to just being told what to do) and they have the knowledge and enthusiasm to sustain the process.
Reduced waste, increased work flow, employees that are empowered with the knowledge to affect positive change…..these are the elements that will have a substantial impact on future operations.
Cost Champion generates 40% decrease in service costs
One large company I worked with had an employee who’d achieved success at a process called reverse auctioning. Reverse auctioning is when you put essential services up for bid i.e. elevator maintenance, shopping bags, floor cleaning, window washing. Companies bid on your project and you can clearly see the one that optimizes the cost/quality ratio you are looking for.
The employee was successful in saving money on several minor projects through reverse auctioning but couldn’t secure senior level support to apply the concept to larger contracts. Meanwhile, the company’s garbage retrieval service was seeking a 10% increase in fees.
Management responsible for store operations was educated on the merits of reverse auctioning and that employee became their first Cost Champion. Instead of accepting the increased fees, he negotiated a new contract that resulted in a 40% decrease in cost with no reduction in quality.
The company subsequently gave this employee the responsibility of evaluating their other services in a similar manner and have ended up saving over a million dollars!
The Bottom Line
You can generate millions of dollars in savings simply by delegating the process to the right people and empowering them with the right tools to do the job. This is how you tighten your belt without feeling the pinch!
For more information on Cost Champions and other helpful cost reduction techniques, please visit our website at www.kpmenterprises.ca or email Eugene from the Contact Us page