Evidence One: A €35,000 Business Performance Project That Resulted In Savings Of €1.25 Million
The performance and profitability of a Pan-European manufacturing business were being damaged by the high costs associated with an outsourced service provider.
Time was tight - so were budgets - but the project was potentially sprawling. It required deep, relevant knowledge of the industry sector, and the incisive objectivity that comes with an experienced external perspective to “see the wood from the trees”.
Our initial analysis strongly suggested that not only were there savings to be made in costs (the client's priority), but also significant performance improvements that could be made that would be welcomed by those who were contributing most to profitability.
Despite the client expectation that a new supplier and system was required (with all the associated costs and business disruption), we recommended staying with the existing supplier, making better use of existing functions and capabilities, and undertaking some small scale, but crucial, system changes.
What's more we re-specified the requirements, then negotiated lower costs with the supplier as a "loyalty" bonus meaning that we achieved both lower costs and higher performance.
The Change Dividend
Time savings: we completed the project in 4 months instead of the anticipated 6-9 months.
Cost savings: we saved the client a minimum of €250,000 a year for a period of at least 5 years - a €1.25 million saving.
Performance bonuses: less quantifiable, but almost certainly making a greater contribution to the client's bottom line were the improved information and its faster supply that meant that the sharp end of the business could perform better.
The Change Dividend summary: measurable savings of €1.25 million plus improved bottom line performance for a Harlaw fee of €35,000. Indisputably, that's a change dividend worth having.