Our experience has taught us that there are three key steps to ensure VfM strategies are embedded successfully and can demonstrate true value for your stakeholders.
1. Engage your community
Engaging stakeholders in any VfM initiative is vital, a service can never deliver value for money if it adds no value for the customer. Peter F. Drucker famously stated ‘There is nothing so useless as doing efficiently that which should not be done at all’. After all achieving customer satisfaction is extremely difficult if you don’t know what they need. Stakeholders within the organisation must also be able to contribute to the strategy and have a clear understanding of their responsibilities to deliver VfM.
2. Make Spend Visible
A common problem many organisations face is not knowing exactly what they spend. Once visible, costs can be challenged. But, first of all, you need to generate a complete understanding of your spend and a prioritised Cost Reduction Plan.
Once all spend is visible classify it to enable consolidation of spend across the organisation. The United Nations Standard Products and Services Code (UNSPSC®) offers a single global classification system that can be used for company-wide visibility of spend analysis & cost-effective procurement optimisation.
3. Ensure your VfM strategy is based upon a continuous improvement programme.
Your VfM Strategy should establish a rolling programme of reviews. Once your costs are visible and classified improvement opportunities can be identified and prioritised. CEOportal manages this for you and as you make improvements the system allows you to establish and monitor a cycle of improvement initiatives.
Value for money does not simply mean cutting costs as services will suffer. Instead a holistic approach is required that looks at optimising cost & efficiency. Eliminating waste and streamlining business processes used to deliver services will improve quality of the service whilst reducing and validating costs as a result.
Using a cost management system like CEOportal also ensures there is a full audit trail available on-demand for publishing costs & quantifiable results to your stakeholders.
For more information on how we can support your VfM Planning please contact us.