Enterprise-wide Cost Optimisation Diagnostic
Partnering with a global nuclear medicine company to support the rationalisation and opportunity assessment of delivery cost reductions and better buying platforms.
To discuss how we can help you with similar challenges please contact Will Sillar.
The Problem
- With the current investors targeting an exit in 2025 and the client capitalising on its market position, the organisation had grown quickly to €750m in annual revenue and an EBITDA of approximately 30%.
- There had previously been little focus on cost management and third-party expenditure, with each of the three business units conducting their own buying, budgets typically rolling over year on year and the exponential growth across the group adding considerable cost.
- The Leadership Team required support to identify sustainable internal and external savings opportunities. The 4C team was tasked to conduct a company-wide eight-week diagnostic with the aim of identifying savings to offset the base business inflation in their year-year plan.
The Solution
- The 4C team partnered with the client’s Leadership team across each group to review the current cost structure and understand any opportunities for optimisation.
- Our approach consisted of three key activities over the course of eight weeks including current state analysis, opportunity assessment and opportunity prioritisation.
- At the start, we conducted rigorous data analysis to understand the current external spend and internal spend on personnel-related expenses, including understanding processes and benchmarking spend against industry standards.
- We undertook spend rationalisation and opportunity assessment of delivery cost reductions and better buying platforms to reduce external costs and optimise ways of working.
- Concurrently we validated opportunities through discussions with key stakeholders, further data analysis and prioritised them based on opportunity size and business need.
The Impact
- We identified over €40m of cost optimisation benefits, reducing total spend by up to 11% through the implementation of strategic sourcing, operational excellence, workforce optimisation and investment in platforms to optimise ways of working, leading to improved practices and greater wellbeing of patients.
- The client benefited from an improved engagement and empowerment of the leadership teams across the business units to optimise their individual and group costs with the opportunities presented.
- The 4C team were invited to undertake the implementation phase of the cost optimisation strategy.