At EXYGE, we understand that cost reduction is a delicate and strategic task that must be approached with precision, transparency and expertise. Our methodology CRP – Cost Reduction Program is designed to execute these interventions effectively, minimizing risks and side effects, such as low morale, unwanted turnover and decisions that may affect the organization’s operations or revenues.
Why is accurate cost reduction important?
Poor cost reduction management can lead to poor decisions that strangle the organization:
- Cutting costs in the wrong places, affecting operational and commercial capacity.
- Generate uncertainty in the team, leading to low morale and unwanted turnover.
- Implementing changes without proper analysis, compromising service quality and business sustainability.
That is why, at EXYGE, we apply a structured and data-driven approach, ensuring efficient and controlled execution that translates into real and sustainable savings. The hallmark of a poorly executed cost reduction project is that costs rise again after a time to their original level or even higher.
How Do We Do It?
Our methodology for Cost Reduction consists of 5 steps categorized into 3 major stages:
- Identify areas of opportunity where reductions can be made (“Find the Savings”)
- Execute the cost reduction opportunities plan in an orderly and effective manner (“Seize the Opportunities”)
- Stabilize the measures adopted and establish a dynamic that allows you to monitor, adjust and reinforce the measures that generate lower costs (“Keep the Savings”)
Through the 3 stages, in-depth analysis, precision and prioritization in execution and strategies are integrated to ensure business continuity and effectiveness:
- Comprehensive Analysis of Operating Costs
- We carry out a detailed diagnosis of the key areas of expenditure in the organization, identifying opportunities for reduction without compromising operations.
- We use benchmarking benchmarking tools tools to compare process performance with global standards (e.g. those of APQC, SSON, PEX) and detect areas for improvement.
- Strategic Prioritization
- We classify costs into essential and non-essential costs to avoid decisions that may affect sales, productivity or service quality.
- We evaluate short, medium and long-term impacts, ensuring a balanced implementation that maximizes savings with minimal impact on equipment and operations.
- Process Optimization and Redesign
- Rediseñamos procesos clave para eliminar ineficiencias y redundancias ya identificadas como oportunidades, aplicando metodologías de optimización y automatización de acuerdo con el plan maestro de ejecución.
- If the cost reduction plan requires it, we implement BPM tools, digital collaborative environments or orchestrate more complex solutions that simultaneously incorporate BPM, RPA, OCR, CRM and other advanced technologies to reduce manual tasks and accelerate processes in situations with a high transactional volume, generating savings in time and operating costs.
- Not everything is about technology when implementing process improvements. There are often “quick-hits” that can be implemented quickly and are also “low-tech“, meaning they do not involve adjustments to the technology used, but rather a change in organizational habits.
- Change Management Strategies
- We design change management plans to ensure that employees understand, adopt and adapt to the adjustments made, minimizing resistance and the impact on morale.
- We develop transparent communication and support strategies to preserve the trust and commitment of the team, making a difficult adjustment such as the cost reduction initiative more bearable for the organization.
- Measuring and Monitoring Results
- We implement key indicators (KPIs) and dashboards or reports to monitor and measure the results of the interventions.
- We ensure continuous monitoring to ensure that savings are sustainable and aligned with strategic objectives.
Results We Drive
- Sustainable savings aligned with business priorities.
- Optimization of processes and resources, eliminating inefficiencies and redundancies.
- Reducing the risk of incorrect decisions through data-driven analysis.
- Preservation of organizational morale and stability through effective change management.
- Greater operational efficiency without compromising quality or revenue-generating capacity.
Benefits of Our Cost Reduction Methodology
- Precise and structured execution that avoids arbitrary cuts, which tend to bounce-back costs once the initiative passes or has to be interrupted due to the side effects it produces.
- Focus on operational optimization and application of best practices. Cost reduction has to “make sense” and benefit the operation, otherwise it will not be sustainable.
- Minimizing side effects, such as unwanted turnover or low morale. It must also involve the entire organization in achieving the objective: a measure perceived as an “from above” will not achieve the stated objectives.
- Generation of savings that boost organizational sustainability and competitiveness. The long-lasting effects of cost reduction plan initiatives depend largely on the stabilization of operations under the new parameters, creating new organizational habits that positively impact the sustainability of the measures.
At EXYGE, we help organizations reduce costs in an intelligent, balanced and sustainable way, ensuring that each decision is aligned with the strategy and long-term success of the business.
We have practical experience in managing cost reduction initiatives, which must address not only operational or financial issues, but also involve a high component of change management and uncertainty mitigation, in order to smooth out the adjustment and its effects as best as possible.
All companies need to implement operating cost reviews at some point in their operating cycles in order to improve added value and profitability. However, not all companies manage this well and this constitutes a risk, since the savings achieved can be offset by the collateral effects, or worse, return to their initial levels without sustaining the savings. This is where EXYGE can help you navigate a difficult project, minimizing the collateral effects and implementing actions that allow you to stabilize the new reality and maintain the savings.
Would you like to explore whether we can help with your initiative? Request a video call and let’s chat!
