Original article from the Flevy business blog can be found here: http://flevy.com/blog/effectively-controlling-your-businesss-costs-here-are-5-frameworks-on-cost-management/ Managing and reducing costs is a critical for any organization’s survival. It’s a prerequisite for staying competitive. Below are 5 frameworks used by management consulting firms specializing in Cost Management . They cover initiatives that range from department-specific to enterprise-wide. Cost Reduction Opportunities (across Value Chain) https://flevy.com/browse/business-document/cost-reduction-204 This document identifies 45 cost reduction initiatives across the Michael Porter Value Chain, categorized into enterprise-wide, assess management, and function specific (e.g. Finance, Operations, Sales & Marketing, IT, HR, etc.). Cost Reduction Primer https://flevy.com/browse/business-document/cost-reduction-primer-650 Spend reduction can lead to significant cost savings typically in the range of 10-25%. It usually identifies a mix of short and longer term cost reduction opportunities. The objective of this document is to describe and provide guidance around the approach and practices applied on spend reduction engagements. Cost Reduction Methodologies https://flevy.com/browse/business-document/cost-reduction-93 This document discusses various cost reduction methodologies and concepts, including the following: Process Optimization, Strategic Sourcing, Shared Services, Business Process Outsourcing. Enterprise Cost Reduction (ECR) Approach https://flevy.com/browse/business-document/enterprise-cost-reduction-approach-704 Often, an organization must identify and size potential saving opportunities within controllable expenses. To ensure that these savings can be realized and sustained, a holistic approach to tackling controllable expenses is required — this document presents such a holistic approach.

1. Effectively Controlling Your
Business’s Costs? 5 Frameworks on
Cost Management
Contributed by Flevy on May 7, 2014 in Operations & Supply Chain
Managing and reducing costs is a critical for
any organization’s survival. It’s a prerequisite
for staying competitive.
Below are 5 frameworks used by management
consulting firms specializing in Cost
Management . They cover initiatives that
range from department-specific to enterprise-

2. wide.
Cost Reduction Opportunities (across Value Chain)
https://flevy.com/browse/business-document/cost-reduction-204
This document identifies 45 cost reduction initiatives across the Michael Porter Value
Chain, categorized into enterprise-wide, assess management, and function specific (e.g.
Finance, Operations, Sales & Marketing, IT, HR, etc.).
Cost Reduction Primer
https://flevy.com/browse/business-document/cost-reduction-primer-650
Spend reduction can lead to significant cost savings typically in the range of 10-25%. It
usually identifies a mix of short and longer term cost reduction opportunities. The objective
of this document is to describe and provide guidance around the approach and practices
applied on spend reduction engagements.
Cost Reduction Methodologies
https://flevy.com/browse/business-document/cost-reduction-93
This document discusses various cost reduction methodologies and concepts, including the
following: Process Optimization, Strategic Sourcing, Shared Services, Business Process
Outsourcing.

3. Enterprise Cost Reduction (ECR) Approach
https://flevy.com/browse/business-document/enterprise-cost-reduction-approach-704
Often, an organization must identify and size potential saving opportunities within
controllable expenses. To ensure that these savings can be realized and sustained, a holistic
approach to tackling controllable expenses is required — this document presents such a
holistic approach.
Reducing the Cost of Quality
https://flevy.com/browse/business-document/Cost-Reduction-through-Quality-
Improvement-150
This training fits well into any improvement initiative, including TQM and Lean
management. The Cost of Quality (COQ) methodology instills a practical approach to
quantifying the financial impact of the Cost Of Non-Conformance (CONC) and the Cost Of
Conformance (COC).
The authors above have created documents that cover topics beyond operational improvement. Check out these their
documents here:
http://flevy.com/seller/learnppt
http://flevy.com/seller/documentsfiles
http://flevy.com/seller/oeconsulting

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