There’s an old saying, ‘You have to spend money to make money,’ but what about ‘Spending money to save money?’ While it might seem like a paradox, organisations that spend money to identify and optimise their organisation can indeed save money through making the investment.

Our BeHOLISTIC model can be used to reduce costs by identifying and eliminating redundancies, standardising and automating processes, consolidating platforms and portfolios, and improving sales performance across your organisation. It achieves this through a holistic, end-to-end approach that won’t cause unnecessary or problematic changes to other parts of your organisation.

Where BeHOLISTIC can be used to optimise your organisation to achieve higher savings

1. Evaluating products and services portfolio

Balancing cost-efficiency with citizen value often resembles navigating a complex tightrope. Over or under-governance may lead to superfluous initiatives or a surplus of low-value offerings. A thorough evaluation of your service portfolio can spotlight areas ripe for cost trimming. According to McKinsey, a well-curated portfolio can lead to a 10-20% cost reduction and a higher return on investment for capital expenditures.

BeHOLISTIC can help organisations to evaluate their product and service portfolios to identify areas for cost reduction through:

Business Model (B): Re-evaluating the business model to focus on more cost-effective services or customer segments can lead to enhanced cost management. This might involve restructuring or modernising less cost-effective services.

 Outcomes:

• Reducing interactions within less cost-effective customer groups

• Improving service delivery performance

• Utilising digital channels

 2. Optimising organisational design

Organisational design consists of multiple elements, including organisation structure design and methodology, work and job design, implementation, and business and operating models. According to global research on organisational design conducted by The Josh Bersin Company in 2022, over 60% of organisations only rated their effectiveness in each of these elements as low or moderate, with 79% rating their ineffectiveness across work design and 77% rating their organisation’s structure design as low or moderate respectively.

The same report provided the outcomes for the 11% of companies surveyed that had a great organisational design that was agile and accountable. These organisations are 2.3X more likely to exceed financial targets, 27X more likely to retain employees, and 13X more likely to innovate effectively.

Our BeHOLISTIC framework can assist public sector organisations in optimising their organisational design, unlocking latent value in existing resources, enhancing performance, and realising significant savings through:

Human Capital (H): Implementing training programmes with a focus on multi-skilling can mitigate the necessity for specialised roles, thereby contributing to cost reduction. Moreover, adopting a flexible workforce model can aid in managing labour costs more effectively.

Organisation Design (O): The introduction of cross-functional teams can dismantle silos, leading to a more efficient utilisation of resources and consequently, cost reduction.

Culture (C): Cultivating a culture of cost-awareness amongst employees can reverberate positively across various organisational facets. This could encompass incentivising cost-saving initiatives and advocating frugality. 

3. Evaluating the Delivery Model

Exploring and assessing how your organisation facilitates user access to services through applications, manages data storage, and integrates other business resources in the end-to-end IT service delivery can unveil opportunities for cost savings.

A Gartner article highlighting 10 IT cost optimisation techniques posited that three of the top four strategies could lead to a cost reduction of 10-25% within 18-36 months. These encompass implementing shared services to save 15-20% of service costs, consolidating enterprise data centres to economise 10-20% on data centre budgets, and rationalising along with standardising enterprise applications to save between 15-25% on the application budget. 

The BeHOLISTIC framework can guide organisations in scrutinising and refining their delivery model through:

Location (L): Revisiting the location strategy can yield cost savings. For instance, relocating to areas with lower rent or operational costs can significantly impact the budget positively.

Outcomes:

• Evaluating IT delivery models

• Consolidating IT infrastructure and the application landscape

• Empowering organisations to leverage market strength in negotiating terms and conditions with vendors

4. Process optimisation

Streamlining processes through standardisation and automation can lead to cost reductions, boost service performance, and increase the overall operational maturity for an organisation to be future-ready with the agility and resilience to respond to continual change around them.

In research conducted by Accenture on operational maturity, organisations were segmented by their level of operational maturity into categories of stable, efficient, predictive, and future-ready. Organisations considered future-ready achieved up to 50% productivity and efficiency gains.

BeHOLISTIC enables public sector organisations to identify and streamline processes, leading to cost reductions through:

End-to-End Value Chain (E): Employing Lean methodologies to eliminate waste from the value chain, thus trimming costs.

Information/Data (I): Implementing data analytics tools can help identify inefficiencies and bottlenecks in real-time, allowing for quicker decision-making and cost savings.

 Outcomes:

• Standardising and automating processes

• Reducing error rates

• Outsourcing non-core activities

5. Optimising Vendor Management and Third-party Costs

Streamlining expenditure on IT equipment, resources, and services through vendor management and contract renegotiations can significantly contribute to cost reduction.

An EY article titled ‘The Five Areas of Focus for Cost Optimisation,’ highlighted that 47% of enterprises manage more than ten vendor relationships for a single IT initiative. Enhancing and consolidating these relationships through prudent vendor selection and revisiting existing associations can mitigate execution risks and foster long-term value creation.

The BeHOLISTIC framework can aid organisations in optimising vendor and third-party costs through:

Suppliers (S): Implementing a Just-In-Time (JIT) inventory system can diminish storage costs and enhance cash flow, necessitating a robust relationship and effective communication with suppliers.

Outcomes:

• Contract renewals and vendor rationalisation

• Adjusting existing contracts to meet actual needs

• Curtailing transport costs

6. Optimising Technology Utilisation

Conducting an audit of your current technology platforms and vendors can unveil duplicative applications, unnecessary licences, or redundant systems. Streamlining your technology stack not only lowers operating expenses but also bolsters data security and liberates employee time for other critical tasks.

A study by the Harvard Business Review disclosed the significant time employees expend toggling between apps and websites for their tasks—around 1,200 switches per day, costing four hours weekly or about 9% of their work time.

The BeHOLISTIC framework can assist organisations in harnessing technology for cost reduction:

Technology (T): Transitioning to cloud-based solutions can curtail expenses tied to maintaining and upgrading physical servers and data centres. The deployment of Robotic Process Automation (RPA) in repetitive, rule-based tasks significantly cuts down manual effort and errors, leading to notable cost savings.

Outcomes:

• Consolidating platforms

• Enhancing vendor management

• Leveraging synergies to bolster negotiation power