TECHNICAL COMPETENCE CENTRE

Infrastructure Costs

Infrastructure Costs: managing the variety of organizational costs efficiently

Infrastructure costs are necessary for the functioning of any organization, they can be characterized in extremely different ways and have a different impact depending on the business at hand. When considered individually the amounts often seem negligible. However, when considered altogether they reach significant totals.

It is common to draw attention away from the management of the single cost, on one hand because it may seem too negligible to take care of, on the other because it requires specific expertise that isn't always available in-house.

The Competence Centre for Infrastructure Costs offers business analytics tools for Digital Cost Management so as to apply efficient control over costs while wasting as little energy as possible.

Insurance

Critical Issues

This cost category is often handled by in-house personnel with limited relevant skills, who handle accidents in a non-professional way; in other cases its management is fully delegated to a broker or local agencies of the insurance companies, thus losing know-how and control. The growth of companies and the markets is instead demanding insurance policies that are always up-to-date so as to guarantee coverage of all corporate risks and, at the same time, the best financial terms and conditions.

Intervention Strategy

Risk Assessment to analyse the insured risk, optimization of the policy structure and reduction of penalizing clauses, Cost Management to reduce the applied interest rates. Introduction of Risk Management systems to contain the accidents rate and improve the claims/premium ratio. Support in broker choice and contract optimization.

Consumables

Critical Issues

These goods have a low single-unit value, but the issue becomes relevant if we consider their Total Cost of Ownership (TCO). Companies often show low sensibility towards controlling this expense, entrusting its management to non-specialized staff who work thinking about satisfying the internal client and not in terms of cost optimization or optimization of the processes connected to it.

Intervention Strategy

Needs analysis and basket optimization with products chosen based on the real needs of internal clients. Purchasing price optimization by setting up and managing tenders, and optimization of characteristic cost processes. Introduction of digital tools to support operational activities and to analyse and monitor cost trends over time.

Advertising ( Brochures / Flyers / Direct-mail Catalogues )

Critical Issues

This cost category requires specific skills in supplier selection and accurate analysis of the relationship between cost optimization and needs, to assess for example the number of prints for a catalogue so as to achieve a good level of savings compared to the unit cost, avoiding overprinting and thus waste.

Intervention Strategy

Efficiency improvements on all costs for layout, printing, and distribution, and assessment of the number of prints actually needed based on the rate of absorption of relative markets. Optimization of operational supply specifications, monitoring and checking of distribution, contract optimization, and market benchmark.

Real Estate Management

Critical Issues

This cost category has a significant impact on the management of the company in financial and legal terms: The proper sizing of the need for space and careful evaluation of the geographic location of the chosen facilities is particularly strategic. This is why such studies could take up a lot of the company's time and resources, and could require specialized skills that aren't always available within the company itself.

Intervention Strategy

Cost Management of passive rental by conducting a market analysis and negotiating with lessors. Real Estate Sourcing to rationalize purchases and to contain overall work-related costs: analysis of space needs, identification of optimal solutions, support in defining the contract structure, negotiation with other parties.

Cleaning

Critical Issues

Cleaning costs are an important chapter under Facility Management. It is important to carry out a careful and cautious supplier selection to avoid problems related not only to the accuracy and quality of the service, but also to compliance as regards the corporate policy. For example, as regards environmental sustainability when using certain procedures or the use of certain cleaning products, tools and chemicals.

Intervention Strategy

Optimization of the tender contract, with analysis of cost drivers as regards the supplier's service and the client's characteristics. The supplier's activities and their choice of materials and tools are assessed and monitored through technical inspections. Internal and external benchmarks allow us to prepare technical contract specifications and calls for tender with SLAs and KPIs. Benchmarking to select and validate suppliers.

Waste Management

Critical Issues

This cost category is not easily monitorable, as it includes often unspecified fixed and variable costs, such as tools, selection, warehousing, transport, disposal and taxes. On top of these there are those aspects that regard the relationship between private corporate services and public service, municipally owned, and taxes that follow constantly-changing regulations.

Intervention Strategy

Cost Management on costs for waste collection, warehousing, transport and disposal, optimizing and redesigning the service if needed. Verification of proper recycling, analysing real logistic flows, to have a quantification of the needs to be used as negotiating element with the suppliers. Benchmarking to select and validate suppliers. Auditing to verify proper calculation of waste tax (Italian TARI) and management of discrepancies with the Public Administration.

Security Management

Critical Issues

This cost category requires wide-spectrum and highly specialized skills so as to be able to satisfactorily "secure" several aspects of the business. Improper management of this cost category, on the other hand, could have a strongly negative effect on the whole structure, because it involves different roles and processes at different levels.

Intervention Strategy

Analysis and optimization of the safeguard systems for the company's human and material resources. Risk assessment and verification of the prevention plan, of operational and behavioural aspects, of the institutional and regulatory framework, of new technological opportunities, of technical specifications, of SLAs and KPIs. Benchmarking to select and validate suppliers.
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