Twelve tools that purportedly help managers find and reduce costs

The following list comes from an article in Finance & Risk Mgt. Commentary, Oliver Wyman, Spring 2008 at 6. The article says that companies ought to master 16 “tools to identify and manage costs.” Several of the tools seem irrelevant to general counsel (“Marketing effectiveness,” “Collections effectiveness,” “Sales force management,” and perhaps a fourth — “Controls optimization” – which was not explained. That leaves a dozen cost control tools that general counsel might deploy.

1. Internal and external benchmarking (See my category: Benchmarking.).
2. Shared services (See my post of Feb. 4, 2008: five references to shared services.).
3. Process reengineering (See my post of May 11, 2008: e-billing as cause of business process reengineering.).
4. Lean technologies (See my posts of Nov. 14, 2005: Lean Six Sigma at Xerox; Jan. 15, 2006: at GE; June 9, 2007: lean operations; and Dec. 19, 2005: learning organizations and “lean thinking”.).
5. Six Sigma (See my posts of Feb. 13, 2008: 18 references cited; and Feb. 17, 2008 #2: low ratings on effectiveness.).
6. Complexity reduction (See my posts of March 13, 2007: references to four posts; and April 22, 2008: quantitative case analysis.).
7. Value sourcing. If this means snappier processes to retain external counsel and vendors, then procurement’s contributions come to mind (See my post of March 1, 2008: 17 references cited.).
8. Capacity management. This tool might mean how to define the work the law department should do (See my post of April 9, 2008: quasi-legal services and 14 references cited.).
9. IT project portfolio rationalization. I suppose this means to lop off IT projects that do not look likely to provide a good return on your investment.
10. Rightshoring. I suspect this has to do with what I call “offshoring” (See my post of Dec. 16, 2007: 19 references cited on offshoring.).
11. Outsourcing. This probably means hiring lower cost providers for a service.
12. Eliminating cultural entitlements. The examples given of this tool are “such as entourages of finance, marketing and HR staff at multiple levels and the ability to ‘opt out’ of corporate shared service providers” (See my posts of Nov. 16, 2005; Nov. 20, 2007; Dec. 17, 2007; and May 30, 2006: culture and values.).

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