Strategic & Operational Cost Management (SOCM)

With the change in the economic climate many enterprises - small, medium and large; will be faced with financing challenges – both strategic (debt financing) and operational (cashflow). But these challenges have been faced by enterprises in Ireland and overseas over many years and, based on proven experience of strategic and operational cost management. Taking from my corporate and consulting experience over the past 20 years, I have developed an accelerated approach to identifying and prioritise cost management opportunities. This “hypothesis-led” approach complements the other Enterprise Healthcheck tools and allows an enterprise to action the optimum cost management (reduction) opportunities based on both strategic and operational priorities. For want of a better name I will efer to this approach as SOCM.

Strategic (tomorrow) AND Operational (today) approach
The SOCM is an accelerated approach to cost management – where “best practices” have been embedded in the project methodology and tools. Then, using a hypothesis-led approach (identifying the most likely 20% of the enterprise where 80% of the costs/savings will lie), accelerates the review – ensuring speed of delivery and minimum project costs. The proven cornerstones for successful cost management reviews:
+ Creation of an integrated, hypothesis-led programme
+ Focus on realising benefits early
+ Achieving buy-in and sustaining the savings

Because “best practice” and past experience of cost management are directly incorporated into the project methodology, organization and tools (see the graphics), project quality is equally embedded, supported by proven project management techniques plus the experience of the consultants that will work with the enterprise.

Applying Best Practices
A critical element of any cost management review is to understand where costs are actually incurred during the ongoing operations of the enterprise. Based on “best practice” and past experience I have developed the SOCM Cost (Value) Chain – a way of looking at an enterprise from the five areas that both incur costs and generate value.


Hypothesis-led approach
Hypothesis-led approach involves working with senior management in the initial stage of the SOCM project, identifying priority areas – based on enterprise-specific insight & experience; where managers believe cost saving opportunities exist.

An SOCM question-based “ready-reckoner” has been developed, incorporating “best practice” & past experience, to facilitate hypothesis generation. Once identified, this approach ensures that the review focuses on areas that are known to be costly or where senior managers believe that costs could (or should) be managed better.


In addition to analyzing costs (as part of an SOCM review) there are also sound cost management disciplines and principles that are incorporated into an SOCM review:

SOCM Principles:
 Strategy
 Incentives & Controls
 Business Design
 Cost Management
 Continuous Improvement

SOCM Disciplines
 Strategic cost management
 Cost transparency
 Management tools
 Cost culture
 Continuous improvement

Grant Management Guiding Principles

“Best practice” can be an inappropriate term to use – as what suits one organisation may not suit another. But having assisted a number of grant providers over the past number of years, there are common themes – “guiding principles” - that impact a grant provider and its grant management processes. So, while I have not listed out these “guiding principles” here, I have gathered these common themes together.

Naturally, there will be certain assumptions that support grant management “guiding principles” (to try and close the gap between grant providers and the way that they work) so I have used the following grant management process as the basis (drawing on the practical experience that I encountered with grant providers):

Supporting this value chain are the following assumptions (which underpin the “guiding principles” which I have identified:

 Grant management is an end-to-end process that is initiate with the initial application for a grant through the final payment of that grant
 Compliance with all donor requirements can be met throughout the grant management processes (initial grant application, through to final payment), including compliance with sound financial management practice and controls.
 The actual payment (settlement of the financial responsibility) of a grant is a financial transaction within the accounts payable (AP) function and as such must meet the appropriate financial management standards of control, reconciliation and audit.

I have prepared 27 “guiding principles” (15 management principles and 12 process principles that, combined support the overall grant management) under the following headings
 Planning & Design (5)
 Operations Management (5)
 Performance Management (5)
 Technology Management & Enablement (6)
 Data Management (3)
 Financial Management (3 – not including corporate governance & compliance requirements)

Enterprise Healthcheck Update

Drawing on the work that I have done with small and medium enterprises in capitalising on the opportunities of the internet (see eCommerce for Success) I have updated the Enterprise Healthcheck tool to include an eReadiness assessment that covers the following:

- Company Commitment to the internet
- Competitive Environment
- Distribution Chain (website/internet)
- Product Database
- Product Photos
- Online Sales fulfillment
- Legacy Computer Systems
- Internal (IT & Website) Maintenance Staff
- Development/Developer Readiness

Enterprise Healthcheck

Over the years I have worked with a number of companies and organisations in the areas of organisation, people, performance and cost management. In today’s economic environment I looked back at these past experiences and took the lessons that I learnt and the techniques that I used and I have brought them together into a single “Enterprise Healthcheck” tool.

Depending on the priorities of your organisation and the challenges that face it, you can chose to spend between 2 hours and two days on the “Enterprise Healthcheck”. A question-based approach that can be conducted via one-2-one interview of group facilitation, the healthcheck provides a scored assessment of your organisation across a set of areas that are proven – through research and experience; to have a major impact on the ability of an organisation to maintain its focus, optimise its resources and achieve its objectives.



These proven areas )in addition to revenue management & resource management) include:
# Human Resource Management: HR Budget; HR Staff; Organisation mission & goals; HR Planning; Staff Data; Computerisation of Data; Personnel Files; Job Classification; Compensation & Benefits system; Recruitment, Transfer & Promotion; Orientation Programme; Policy Manual; Discipline, Termination and Grievance procedures; Industrial Relations (Unions); Labour & Employment law compliance; Job Descriptions; Staff Supervision; Evaluation; Staff Training; Management & Leadership Development
# Performance Management: Service; Strategy; Objectives; Alignment; Performance; Management; Development; Competency; Training; Communications; Mutual Agreement
# Cost Management: Work unit right-sizing; Deduplication; Roles and Responsibilities; Product Review; Poject Review (IT, capital and other); Employee overheads; Connectivity; Sans of control and levels; People, skills and capabilities; Pay rates, allowances and premiums; Demand Challenge – Non Core Processes; Operating Model; Ativity and Process Efficiency; Process Benchmarking; Process Effectiveness (Core Processes)

And supporting these three areas are a set of simple, insightful organisation assessment tools:

- 7-Cs quick assessment tool: Coordination; Commitment; Competence; Communication; Conflict Management; Creativity; Capacity Management
- McKinsey’s 7-S organisation assessment tool: Strategy; Structure; Systems; Style; Staff; Skills; Shared Values
- Organisation Culture assessment tool: Vision; Strategic Direction; Goals & Objectives; Core Values; Creating Change; Customer Focus; Organisation Learning; Empowerment; Team Orientation; Capacity Development; Agreement; Coordination & Integration

These tools will allow you to understand the most relevant aspects of your organisation for today’s challenging environment; identify the most appropriate opportunities that you should focus on in order to consolidate your current position and to prioritise these opportunities so as to maximise your resources in order to achieve your objectives

Volunteering Code of Practice

Comhlamh is a Irish member and supporter organisation open to anyone interested in social justice, human rights and global development issues. One of these issues is volunteering and Comhlamh leads an initiative called Volunteering Options (http://www.volunteeringoptions.org/) which includes a comprehensive website, a volunteer’s charter and a Volunteer Code of Practice for Sending Organisations -

I was recently asked to review the experience of a number of signatories to the code (VCoP) to see what lessons could be learnt and opportunities idenified - both for the code and for the signatory organisations. The structure of the VCoP review mirrors that of the existing audit approach that has been adopted – building on the investment already made by all signatories to the code.

A set of questions – drawing on the VCoP; the Self-audits; Donor perspectives & my own experience - formed the basis of the review which was conducted as a series of one-2-one interviews with the volunteer coordinators from the participating organisations:



The answers from the participants allowed for a “point-in-time” assessment (audit) PLUS an opportunity assessment in relation to opportunities to strengthen the overall organisation’s management processes. By extension, these opportunities can be categorised to allow the lesson learnt from the review to be consolidated and shared among Comhlamh members.

When looking at programme quality, we focused more on “ways-of-working” and this was categorised for the purposes of the under four headings:
Organisation: Assessment of VCoP Principles against organisation requirements (e.g. strategy; resourcing; planning; etc.)
Volunteer: Assessment of VCoP Principles against volunteer responsibilities (e.g. use of Comhlamh Volunteer Charter)
Programme: Assessment of programme (proposals/plans) & policies/procedures for alignment with CoP principles
Partners: Assessment of VCoP Principle against in-country partner responsibilities (e.g. within MoUs; etc.)



Undertaking an exercise like this also allows us to try and learn about the broader Development Agenda of sending organisation. Via the identification of broader development items based on the "Application of CoPs" assessment.

You can learn more about Comhlamh by reading their strategy document here

eCommerce for Success

The "eCommerce for Success" programme provides incremental & applied learning approach for both your own personal development as an entrepreneur and for the development of your business, combined with an interactive, participative programme that allows you to build on your own business ideas and experiences


The programme helps you to understand how visitors to your website will behave and how to design your website to influence that behaviour, helping you to develop strategies and tactics to encourage these visitors to become customers


The incremental learning builds on earlier sessions of the programme and drawing on your own business…

…to define what it is that you need from the internet to develop and grow that business…

…helping you to match your available resources (time; money; 3rd parties; equipment & facilitates; etc.) to your eCommerce plans

Throughout the programme there are practical session on how to get the best return for your investment in eCommerce (the internet & your website)


You will be provided with tools & working papers that we use to build your own eCommerce plans – for both you (personal development) and for your business (enterprise development)


And we draw upon research, from Ireland and Internationally – including research that you undertake as part of the assessment of you and your business' capacity to deliver on these eCommerce plans


What participants said…

Fund-raising & Resource generation strategies for NGOs

I have recently been working with a number of NGOs and Not-for-profit organisations in the area of fund-raising and broader, resource generation activities. During these projects I was able to successfuly use more traditional marketing tools to help identify firstly "what is the product that these organisation offer the Irish market place (i.e. what is the value to the Irish customer/ supporter/donor)?"


Once we were able to define this "product" it was possible to use more traditional business and marketing tools - such as identifying the USP [Unique selling point]; Market segmentation (identifing target markets and potential niches); preparing both a product-based marketing mix (Product; Price; Place; Promotion) and a service based mix (marketing mix plus People; Process; Physical Evidence and Packaging).

This is a great example of using proven business technique for the benefit of non-traditional businesses (i.e. Irish NGOs) and helps these organisations to try and make best use (i.e. best return) for the limited financial resources.

eCommerce Programme

I have been asked to design and deliver a 6-day (over 6-weeks) programme on eCommerce for a County Enterprise Board. From eStrategy, through Planning to practical and technical issues of implementing and managing a website.

While much of the content for this programme I was very familar with it was really interesting to research (on the web) additional and complementary insights on the various aspects of establishing and running an eBusiness. But know I have a single repository of all of the background infoprmation and sources - plus a fully prepared programme including presentation slides, exercises, practical handouts and case studies.

To learn more about this programme, click the link

Successfully Marketing your Business Online

I have recently faciliated a series of sessions with Start-Up and Small-Medium (SME) companies on how to market their business via the internet. These sessions formed part of progammes supported by the County & City Enterprise Boards (www.brite.ie)

Building upon elements of the formal business planning process, together with examples from

• actual websites


• top-tips from published industry & research papers


• on-line services that are readily available


• good practice on content & layout

I designed a simplified template for planning a start-up/small enterprises' internet marketing strategy (& implementation).
If this is an area that interests you I have uplaoded a series of support papers on my website (www.entanddev.com) that you can access directly.

And of course you can contact me directly (see "contact me" link for details)