Improving EBITDA through a cost reduction program.
We recently concluded an interesting and challenging assignment: reducing costs in a mobile telecom operator to improve EBITDA levels in more than 5 percentage points in a 6 months period. As said, extremelly challenging. Why? After more than 6 months of crisis, the most obvious operational inefficiencies in telecom operators have already been wrung out of the system recently. The low-hanging fruit has been picked, and yet more cost savings must be found. There was, in other words, a need for a new, more comprehensive approach to cost containment that looked beyond the obvious and delved deeper into the organization.
mmC Group used a pragmatic -quick-wins driven- unit cost reduction method based on extensive internal and external benchmarks to optimize costs. The methodology ensured ‘dedicated’ client participation and sign-offs on implementable ideas at all senior levels in the client organization. A robust tracking and monitoring mechanism was instituted to ensure systematic implementation and savings accruals to the client.
Savings worth a significant per cent of the addressable cost base were syndicated. Currently, we are assisting the client to implement and institutionalize an ‘internal’ continuous improvement program. Eventually revenue will get a boost as 3G services are adopted by consumers, but for the present and next years, cost optimization will be the way for operators to stay ahead of their game and to sustain long-term innovation capability. Please find next the cost reduction case slides we have prepared for this post. Feel free to ask for additional detail if required.
Enjoy the reading. CVA