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Cost Optimisation for the Telecoms Professionals Programme
Introduction—the cost management process
- The risks of poor cost control
- Capital and revenue costs
- The importance of cost awareness
- The importance of cost reduction
- Cost management – the key aspects
- How to build a cost management and control process checklist for your areas of responsibility
Initiating strategic cost management projects
- Strategic change – the catalysts
- Initiating a strategic cost management programme – workgroup: plan of action, objectives and scope, initial fact find, board presentation
- Strategic information needs
- Leadership risks and mitigation
- Suggested framework for initiating a strategic cost management programme
Cost removal—taking out costs
- Cost awareness
- Costs of poor design/processes
- Value engineering
- Removing redundant costs
The need for commercial, technical & financial appraisals
- Understand the problems before cash is committed and costs incurred
- Making the effort to identify commercial and technical risk
- The time value of money – DCF techniques for long term projects
- Cost models for production processes and projects
- Costing models – project appraisals
- The use of spreadsheets to identify sensitivity and risk
- How to focus on risk management
Cost management processes & techniques
- Big business that went bust
- Corporate governance
- Structures and processes
- Operational cost management techniques
- Cost drivers and performance measures
- Potential weaknesses of cost management techniques
- Common cost optimisation strategies
A strategic cost optimisation methodology
- Methodology overview
- Application of the methodology
- Programmes and projects
Budgeting—proper budgeting challenges costs
- The philosophy of the business – are costs an issue?
- The importance of having the right culture
- The need for detailed business objectives
- Budgetary control measures
- Designing budget reports – for action
Zero-based budgeting—the principles
- Much more than starting with a clean sheet of paper
- What ZBB can achieve
- The concept of decision packages – to challenge business methods and costs
- Only necessary costs should be incurred
- A review of an operating budget
Awareness of overheads & other costs
- Definitions of cost – direct and indirect
- Dealing with overheads
- The problems with overheads
- Ways of dealing with overheads
- Review of overhead allocation methods and accounting and reporting issues
Overheads & product costing
- Activity-based costing (ABC) – the principles and how it may be helpful
- Know the ‘true’ cost of a product
- Should you be in business? Will you stay in business?
- Identifying weaknesses in a traditional overhead allocation
- How ABC will help improve product or service costing
- Identifying which products and activities should be developed and which abandoned
The human factor
- Effective leadership
- Reluctance to change
- Personal interests
- Passive and active methods of winning support
Cost reduction culture
- The need for cost reports
- What measures can be used to identify overspends as early as possible
- Cost control performance measures
Design of cost control reports
- Reports should lead to action and deliver
- Selecting cost control measures which can be acted upon
- Practice in designing action reports
Course summary—developing your own cost action plan
Group and individual action plans will be prepared with a view to participants identifying their cost risks areas and the techniques which can be immediately applied to improve costing and reduce costs.