The analysis enabled a targeted programme of overhead cost reduction to proceed, contributing savings of the order of £10 million per annum.
Priorities
Our client was an international business headquartered in the UK with operations throughout many countries. Their critical overhead costs were people based with operations consisting primarily of major construction projects. It had become apparent that the movement of people between business units and projects, together with accounting movement between overhead and operational budgets was creating doubt about the accuracy of numbers and opportunities for confused organisational accountabilities.
Following a strategic review, the business was progressively reorganising its operations and redirecting investments to grow the business whilst containing overhead costs. Doubt about the organisational accountabilities and costs were starting to act as a dragnet on progress. After the business had been attempting to agree numbers for several months, the CEO finally called for urgent action to definitively clarify the situation.
TRIMENTIS were invited to lead a review and analysis of the overhead organisational structure and to clarify company processes in terms of budgeting, forecasting and reporting of people related changes.
Results
Details of over 800 people were investigated and the actual organisation structure was established and documented as organisation charts and spreadsheets, completed within a matter of weeks.
The analysis revealed a significant number of people (approx 50) of indeterminate status in terms of overhead costs, with line managers identified to address the specific issues.
The analysis revealed overhead costs to be greater than the business had been planning for and enabled a targeted programme of overhead cost reduction to proceed, contributing savings of the order of £10 million per annum.
The overall process involved in the tracking of people changes, and the budgeting, accounting and reporting of numbers across departments was found to have several critical failures making accurate, reliable ongoing reporting an impracticable task. Recommendations for improvement were presented as the basis for fixing the specific problems.
The organisation could finalise their overhead budgets and move forward with their major organisational changes with renewed transparency and accountability.
Approach
TRIMENTIS led two activities in parallel, working with line managers to rapidly establish the ‘actual’ location and status of people, and working systematically on the overall process involved in the accounting of people tracking it through Line Management, Management Accounting, Human Resources and associated Systems and teams.
Using our best-practice approach to process analysis and mapping as one part of our core Change Management Process, key experts within the process were interviewed to reveal many of the key issues and ideas for improvement.
Testimonial
I appreciated the non-confrontational yet rigorous way this study was undertaken. Thank you for delivering the result quickly and professionally.
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