Holistic Profitability Programs are a Game Changer!

Sustainable cost reduction continues to dominate executives’ agendas. Our research into how effectively companies are managing costs reveals significant variation across sectors – with great potential for improvement among those at the lower end of the scale.

Cutting costs is at the top of the agenda across most sectors, still, many firms just don’t know how to do it right

Taking costs out of a business is hardly a new phenomenon. It is reasonable, however, to say that cost reduction is often a reaction to a specific market or managerial need, rather than a planned intervention. This is borne from relatively low maturity in optimizing cost and investment in many sectors, despite years of cost cutting. Consequently, sustainable cost reduction continues to dominate executive agendas.

Managing costs is more important than ever

The biggest challenge for companies is establishing structured and skilled approaches

Companies are struggling to establish structured approaches and carry out profitability programs. Surprisingly, lack of subject matter expertise is one of the main impediments. Lack of standards and the absence of clear targets – including rigid progress tracking to achieve them – compound these shortcomings, consequently leading to poor morale and lack of individual employees motivation.

If cost cutting dominates most companies’ agenda why are so many struggling to deliver performances and at the end savings?

What is the key to becoming a cost-out performing leader?

Looking at the situation from a different perspective, one can identify dominant success factors at companies that are doing better than others. A closer look at companies with high maturity in profitability programs, shows the main success factors:

  • Clear focus on skills & competencies
  • Provide & train dedicated resources
  • Establish a transparent process
  • Celebrate achievers and sanction shortcomings
  • a proper tool setup

Outside in view: Primary causes for high performances

Our answer to achieving best practices is driven by six dimensions

Experience from running a multitude of profitability program projects has helped us identify six dimensions for stepping-up to best practice.

  • Run a health check to identify the main weaknesses
  • Define top-level actions
  • Set up a dedicated project team and involve all stakeholders
  • Establish a cost-based reporting and Project Management Office
  • Define content support and focus action fields
  • Inject profitability approach

What comes after the Health Check: The key is to orchestrate all dimensions of a successful Profitability Program in order to reach best practice

What do TSETINIS-EFESO Profitability Programs deliver?

The need for fast and structured Profitability Programs is evident. The question is now how to inject best practice into companies. Interested? The answer could be as simple as that: Get in touch with us and let‘s discuss how we can help establish our proven concept within your organization!

Product Costing
Our Specialists

Working with the most qualified TSETINIS-EFESO Consultants is key to your success.

Speak with an expert in your industry who can help you move your company toward your specific goals. We implement our expertise in a very specific and targeted way and tailor the choice of methods to your individual requirements. In this way, we can ensure your long-term success.

Thomas Plasa

Partner

Performance Management
Operations Excellence
Organizational Performance

+49 173 5418594

t.plasa@tsetinis.com

Linkedin®

Christoph Wotzka

Partner

Profitability & Cost Out Programs
Holistic Product Cost Optimization
Strategy & Organization Development

+49 160 96931167

c.wotzka@tsetinis.com

Linkedin®

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