The Discovery phase is critical in any cost transformation initiative since it offers an understanding of current cost structures, definition of thresholds, and detailing of implementation plans for cost reduction.
To achieve sustainability of these initiatives it becomes important to hold stakeholder interests to the system and make sure everyone concerned is on board from the onset, so early engagement fosters stakeholder ownership and buy-in.
Likewise, the development of sound management frameworks, policies, and goals are also critical, as these steps ensure any misunderstandings or mistakes are avoided moving forward, hence creating the basis for the success of the initiatives.
In the Transform phase, more in-depth opportunity analyses are performed, the estimation of benefits is made and prioritization of initiatives and PoCs is established. We identify which roles are affected, estimate the costs of implementation and where change should take place and what new knowledge is required to address some of the people, process, technology, and data change.
This phase goal is to manage change, minimize disruption, and implement high-benefit changes, as we review and adjust the organisation, identifying key future skills, and establishing systems to track and report improvements from our cost transformation initiative.
Last but not the least, we create a change and adoption plan to communicate and engage all staff that will be involved in the project to promote awareness of the initiatives, what is expected of them afterwards, and what they are likely to benefit once the implementation is complete, in order to ensure full support from all the stakeholders involved.
In the Embed stage, the organisation adopts and embeds new ways of working, new processes, and technological enhancements.
Benefit realisation monitorisation, and reporting kicks-in, and is integrated with routine financial reporting.
This stage also highlights the shifting of attitudes and cultures to promote an innovative and ever-developing culture in the organisation.
Key among the new operational changes is staff’s understanding of the initiative benefits, to ensure high adoption of those, and sustain benefits realised to date in a proactive way.
Cost-conscious culture is one of the key cultural enablers essential for cost transformation in any organisation which helps to drive an effective, sustainable, and dynamic culture based on the principles of innovation, uncompromising efficiency, and adaptability to change.
Clear communication of cost-saving efforts means there is a coordinated approach to cost reduction, good change management procedures help to implement new processes and technology, and ongoing monitoring of benefits from cost management enable corrective action if needed to ensure an organisation’s success.
This culture extends beyond cost saving since it acknowledges and incorporates cost sensitivity as the company’s shared destiny.