Cost Savings: With speedboats to more efficiency
More efficiency at lower costs
Even before the coronavirus pandemic, many companies have been striving to continuously work on achieving more with less effort and lower costs in their IT departments. This usually involves a decision between two fundamental paths: Do I use the (possible) economies of scale of a large organization or is it the stronger lever to serve requirements more flexibly and thus more cost optimized. We believe that small speedboats beat the big tankers here. This had to be proven in a challenging project as part of the spin-off of a group IT department. The prerequisite for success: professional project management with clear, hard targets, without losing people in the process.
For the IT organization, the initial focus is naturally on ensuring the stability of ongoing operations even during a large-scale transformation process. The business goal of reducing costs is not exactly at the top of the popularity scale within the IT organization, even in a carve-out.
Added to this was the immense complexity of our project. In parallel to all other activities, branches were established in 65 countries and made operational in record time. Naturally, this meant that the baseline of the project activities kept changing, as final details of the relevant IT services could only be defined during the establishment of the branch offices. This posed an immense challenge, especially for a completely new IT organization that was used to working in strong dependence on the parent company and naturally did not yet have an international perspective for many services.
Saving with a degree of hardness
At the heart of the kobaltblau approach was extremely close cooperation with all service owners and managers against the backdrop of the challenging framework conditions described above. This ensured that the topic of cost reduction was not only never lost sight of, but also that all relevant potentials were identified at an early stage, where corresponding savings could realistically be realized within the current year. The main areas of action were savings.
- For all variable service components such as projects and CRs, i.e. all non-operational processes for further development and optimization;
- For all consumption-based services, such as the classic number of telephone numbers or accounts;
- In the internal deployment of resources, such as the optimization of similar services in countries and regions or business units in order to utilize synergies and freed-up capacities and also to more easily compensate for any staff departures;
- With suppliers, for example, through intelligent renegotiations or a reduction in the scope of services;
- Also, through the deletion of benefits without replacement.
In order to be able to assess the potential savings in a comprehensible and sustainable manner, kobaltblau applied a consistent hardness level methodology, according to which all measures from hardness level 1 (idea) to hardness level 5 (savings achieved) were literally tracked down to the last detail. The cost-cutting measures implemented were all neatly documented and substantiated, for example by means of corresponding attachments such as confirmations of termination, contract supplements or excerpts from personnel lists. This documentation acted as a “single source of truth” and was audit-proof in every sense in order to be able to communicate a reliable status of implementation at all times. In addition, the CIO and management were always kept up to date by the project team.
Christian Loskarn, Head of CIO Office, Siemens Mobility GmbH
“With its structured approach, kobaltblau helped us to achieve the cost reduction target of 15 percent within one year without reducing the level of service for the business!”
Everyone happy at the end
This extremely consistent project approach by kobaltblau in an equally demanding and global framework produced excellent results to the satisfaction of all stakeholders. A total of 400 services were professionally analyzed and in some cases significantly optimized; 91 measures were derived and implemented, 72 measures were fully implemented. The specified cost reduction target of 15 percent within one year was thus achieved. Or, as our client summarized it in the end: “kobaltblau’s structured approach helped us to achieve the cost reduction target of 15 percent within one year without lowering the performance level for the business!” (Christian Loskarn, Head of CIO Office, Siemens Mobility GmbH)
Cost savings: Achievement of the cost reduction target of 15 percent within one year
