Content rules!

Once upon a time there was CONTENT (him) and long long long long after the content met METHODOLOGY (she). The content is the king. And methodology the queen. And they lived happily ever after. Fairy-tale like. It is. You have to have both to be successful. First tells you which cost categories you should address, where in the processess/contracts/ways of working you should look them up. The second tells how it should be planned and executed.

Why? Without the right content no cost reduction project can be successful. The whole idea is to tackle the right business areas, appropriate costs and to apply correct measures, looking at them content-wise. Methodology only helps us to do it right, to be able to have every single step transparent, measurable, trackable, that is, "under control" to see whether the whole exercise leads in the right direction. Methodology eases the job, content enables the job to be done.

Try not to mix the order up! You can not start with the methodology and hope that someone will come along to fill up with content the empty plan tables of measures. Yes, we can see plenty of such projects. They are doomed to be unsuccessful, at the best very late if you by any chance somewhere in the middle meet the right person (internal or external knowledgeable consultant) to put you on track content-wise.

Here are some tips on the content of the cost reduction program you should follow:

• Don’t focus on selected business areas only. Procurement or IT or marketing alone (the "low hanging fruits of cost reduction") should not be the focus but they should be done: 
• They benefit your company and unleash your team potential 
• The quick wins eliminate/reduce team frustration and prepare for more complex cost reduction initiatives to furnish more substantial improvements.
• Don’t limit the cost reduction activities to mother company – take it along the corporate governance infrastructure. 
• Include subsidiaries in cost reduction activities with same ideas, methodological concept and approach, same executive infrastructure and adjusted goals, initiatives as well as implementation speed according to their specifics. 
• But acknowledge “specifics”!
• Don’t underestimate almost hidden acting of costs doing the law of large numbers! Bite by bite will small unplanned costs swallow your cost reductions away!
• Costs are like food. Slowly and regularly and over time they increase to a point you might have "overweight" problems. Especially, if you do not address them daily and carefully, with or without cost reduction program. Therefore, institutionalize costs by reporting and monitoring them regularly not leaving them only as highest priority category of your controlling officer, but also as a regular agenda of everyday internal meetings or occasional retreats. Introduce Cost committee to prevent rather than to reduce costs. That would excel your business model beyond cost cutting towards cost management of the target costs. If not there yet, use the cost reduction program to set cost management up. 

http://www.avanton.si