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Cost vs Value – An essential choice in Business Transformation

By Nick Berman. Published on 14 June 2016

The cost vs value argument is something that we encounter in our everyday lives and it’s no different when we look at the recruitment market, especially in a transformation environment.

Any sort of transformation needs investment, whether this be in people, process, technology, or all three. As with any investment decision, it is imperative to have a solid business case that represents the best possible return.

When looking at how best to deliver a programme of work, it makes sense to simply identify the time it will take to complete, how much it will cost and the time taken for the benefits to be realised.

What if the time taken to deliver a project and the time taken to realise the benefits could be reduced? The potential impact is huge, yet this is something that very rarely gets considered.

Why? I’m sure that there could be a number of reasons, but the most common I’ve encountered is cost.

As with anything in life, generally speaking you get what you pay for. Whether this be your weekly shop, Michelin starred restaurants or executive cars, most people are happy to spend money if they feel that the quality is superior and they get value. Of course, this relies on people having the means to do so, and businesses looking at transformation are no different.

Let’s consider a property renovation; a subject very close to my heart at the moment. Before starting any work, you identify what you want the outcome to be. You might hire an architect to help you share your ideas and provide a blueprint for your vision. Whether this be an additional bedroom, a new kitchen or simply a makeover to increase the value of the property is irrelevant. This is the end state. And you need a team of experts to translate this blueprint into a reality.

So you’ll meet with a number of building firms before selecting one based on the quality of their workmanship and, of course, cost.

It is at this point you make an important choice. Do you select the less experienced builder as he is far cheaper? Or do you mitigate your risk and choose a more expensive option who you are confident can complete the work ahead of schedule and to a far better standard? Yes, it will cost you more money in the short term, but it will mean you can enjoy the finished property far sooner and reduce the period of disruption you always get with building work.

This is the choice that is made when the resourcing plan for a business transformation programme is pulled together. Do you want to be managing issues all the way through the project or would you like a (relatively) hassle free delivery?

I believe that this question needs to be considered before any transformation programme is embarked upon. Many people have never been through the process before and it can be extremely tough, especially at pinch points on the programme. It is imperative that organisations are able to learn and upskill their staff during any programme, but why settle for anything less than an expert?

Professional interim managers who are transformation experts are not necessarily a cheap option, but they are good value, especially when compared with consultancy firms.

According to numerous studies, around 70 to 80% of all transformation projects fail. What is the cost of that failure? What is the cost of not getting it right first time?

Using a network of high calibre individuals with a number of successful transformation projects under their belts improves your chances of delivering your project on time and within budget. They have the toolkits and expertise to not only ensure successful delivery of a programme, but also to embed the transformation through change management. At the same time your in-house team can remain focused on delivering day-to-day business activity throughout the transformation process.

From an investment decision, surely it’s a no brainer.

Identify business issues, deliver the solution and ensure this is embedded in the culture of the organisation of the future. Rather than simply looking at the cost vs value up front, I truly believe that this needs to be considered throughout a programme and the potential cost of failure or delay must be considered before any investment decisions are made and budgets are finalised.

To share your thoughts on the above or discuss any of your current or past experiences, please do contact me or the Business Transformation team.

Nick Berman
Nick.Berman@etonbridgepartners.com

Case study: How a team of interim professionals secured €50m savings in 18 months.

Nick Berman

PARTNER
BUSINESS TRANSFORMATION & TECHNOLOGY

Nick specialises in senior level (£500 – £2,000 per day) interim management recruitment within business transformation, supporting organisations through significant periods of change. Assignments include cross-functional change & programme management roles as well as transformation project positions ranging from programme directors to PMO Managers.

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