CASE STUDY: Cut Costs In Half
The Retail Sales division of a Fortune 50 Corporation needed to shave 30% off their development costs. They were spending well over the competitive benchmark for their technology – technology that was essential, but did not add to a customer’s perception of ‘added value’. The market would not allow a price increase. If they were to retain market share, their only option was to drive development costs down. Costs had to go down quickly, and substantially – 30 percent.
The General Manager of the retail division asked us to design a WorkOut session to help him cut costs by 30%. We studied the contributing costs and put together three teams to tackle key components of development. This approach addressed the key areas that generated expenses and influenced market requirements:
- Development savings that started at 21%
- Savings of 50% was achieved for subsequent years
- Cumulative reduction in development costs was over $10 million (5 years)
- The GM – a tough business executive – was as pleased with the teamwork as he was with the ongoing cost savings. He called the WorkOut as “a thing of beauty – something unique in today’s business environment”