Strategic Cost Resilience

END-TO-END COST TRANSFORMATION

The COVID-19 pandemic has thrown a light on the fragility of enterprise cost structures. In an uncertain economic environment, the immediate challenge is often simply to get through. But then what? Your shareholders and employees expect you to have a plan in place for rapid recovery. Making this happen isn’t easy. That’s especially so when it comes to critical cash and liquidity as your focus turns from protecting the bottom line to longer-term top line performance.

Add to this new competition, a shift of demand to emerging markets, and tough regulatory regimes that impact your profit and loss (P&L) position, and it is clear that we are in a New World of high cost pressure and cash constraints. Where previously growth and sustainability were the primary business drivers, now cost management and resilience represent a new organizational focus, with the added challenge of ensuring that sustainability is maintained.

Finding opportunities in adversity

Resilience must become the new cost mantra. It’s not just about managing your cost base through a crisis, but about ensuring its resilience going forwards. There is a paradox in that the budget for investing in cost avoidance actions is likely be lacking as a result of the current COVID-19 crisis. At the same time, the pandemic has freed up some rigidity, with virtual working creating real estate opportunities and IT cost flexibility.

So, how do you respond to the current cash crisis in order to achieve lasting economic success? For many organizations, the quick answer is to focus on classic cost-cutting programs and downsizing. However, at Capgemini Invent, we believe this short-term fix isn’t a viable long-term strategy. Rather, we adopt a combined approach embracing financial, strategic and operational dimensions. Of course, employee re-skilling, role changes and, potential redundancy feature in this, but only as part of a much broader strategic cost transformation story.

What can you expect from us?

We mobilize our unique end-to-end capability to deliver significant business process and IT cost reduction impact. One way to achieve this is by looking for new ways to transform your fixed costs and charges into variable models. We help you to stabilize your cash situation, as quickly as possible, to support recovery and ongoing cost transformation. We look for strategic and sustainable cost transformation, not just team downsizing, and endeavor to avoid any levers that might have too big an impact on your suppliers. And, as the COVID-19 crisis continues to impact us all, we are pragmatically learning, taking on board lessons and identifying the opportunities it presents.

How does it work?

A balanced combination of new technologies, qualified employees and our industrial assets offers you considerable potential for cost transformation on the road to resilience. We will help you hit your recovery target on time through the right implementation of the appropriate levers.

Our unique approach to delivering your outcomes is based on:

  • Sector specific approach
    Different sectors have different cost challenges. That’s why we have developed a sector-based approach and strategic recommendations for cost transformation. For example, we might help to rationalize the cost-to-serve in a utilities company, define prototyping improvements for an automotive manufacturer, or support digitalization of the credit chain process in financial services with AI. Throughout, we leverage benchmarks, understand the issues faced by your core functions, and help you seize the opportunities presented by technology and data in your sector.
  • New playground; new rules
    We help you respond to both new and old constraints by turning traditionally long project delivery cycles on their head. From Day 1 we install a digital collaboration platform giving you full transparency of project scoping and decisions, shared briefings and action plans. Our agile approach sees us launching actions in three-week sprints on the way to a fully sustainable operating model that supports current and future resilience programs. Crucially, we are committed to investing jointly with you in a collaborative partnership model focused on your transformation success and shared risks.
  • No stone left unturned
    We know that effective cost management demands a 360˚ perspective of every aspect of your operations, from your core business and support functions, to your technology and the external fixed and variable costs associated with your existing outsourcing arrangements. We focus on them all. We take care of your people. We leverage best-in-class technology. We learn from your data. And all the time we are assessing the potential for cost reduction and/or restructuring, challenging your budget holders, defining a realistic plan to materialize savings, and executing the transformation.
  • The power of end-to-end assets
    Our unique set of packaged assets maximizes the impact of our support, from strategic analysis to implementation. These include our Data P&L Factory dedicated to cost categories analysis and comparison; and our ESOAR 360 standards process redesign methodology combining operational, organizational and digital levers to achieve high performance standards operations. Further, our Digital Factories for RPA, AI, cloud and business process outsourcing give us industrial capability to develop and maintain high quality delivery solutions. In parallel, our as-a-service financial modelling expertise establishes a viable economic model for our clients’ businesses going forward.

What about your people?

Preparing and adapting your workforce in the context of digitalization, simplification and the removal of resource-intensive activities is a critical component of your Strategic Cost Resilience program. Working closely with your HR teams, we conduct a qualitative and quantitative job analysis to identify the skills you need both during and after your cost transformation. This considers the jobs to be created, developed, changed, or that may no longer be required. As part of our broader Workforce transition offering, we support you throughout this sensitive process and help with setting up a social dialog plan in accordance with country-specific regulations.

What is the outcome?

At all times we focus on maximizing your resilience and competitiveness through a shift from fixed to variable costs, achieving economic model agility, and realizing bottom-line containment. We expect to see first results within three months on both your cash and bottom line.

Energy & Utilities

  • • End-to-end improvements across the value chain from generation and grid to sales & service in retail
  • • Achieve significant savings using AI (improve process efficiency), by tackling fixed costs (e.g. IT) and using our industry benchmarks.

Manufacturing

  • • End-to-end improvements across the value chain, from R&D and prototyping, to aftersales efficiency.
  • • Using data and technology to reduce cost of sale, optimize marketing spends, improve supply network, etc.

Financial Services

  • • End-to-end digitalization of credit chain process using AI and data
  • • Achieve significant cost savings from process efficiencies and new ways of delivery, e.g. credit factory.

Meet our Experts

Cyril François

Expert in Business and IT Strategy, Digital Customer Experience, Digital Transformation

Roshan Gya

Expert in Asset management, Business Transformation, Digital Industrial Transformation, Energy Transition

Michael Kaesser

Expert in Energy, Utilities & Chemicals

Antoine Genin

Meet Antoine Genin, Expert in SAP