Overhead efficiency: Cutting costs and rethinking functions

Overhead efficiency: Cutting costs and rethinking functions

Portrait of Fabian Huhle
Senior Partner
Munich Office, Central Europe
+49 89 9230-8486

Robotic process automation and artificial intelligence can bring efficiency gains

Overhead functions such as Finance, Human Resources and IT as well as advisory functions like Strategy and Legal play a major role in a company's success. But the value they add does not come for free: Depending on the industry, between 5 and 15 percent of a business's total costs are general and administrative (G&A) costs. Many programs for improving corporate profitability therefore focus on this very area.

Lean and efficient overhead functions are among the most important prerequisites for ensuring competitiveness now, more than ever. Modern technologies offer ways of meeting the growing requirements while continually minimizing costs.
Lean and efficient overhead functions are among the most important prerequisites for ensuring competitiveness now, more than ever. Modern technologies offer ways of meeting the growing requirements while continually minimizing costs.

Modern technologies open up new possibilities here. While proven means of cutting costs in overhead functions such as through process optimization or outsourcing are no less valid than before, they are increasingly being supplemented by technology solutions. In particular, applications from within robotic process automation (RPA) and artificial intelligence (AI) enable efficiency enhancements on a previously unimagined scale. Because overhead functions often involve a particularly large proportion of repetitive activities, they are ideal for the effective application of automation and machine learning. In our experience, G&A costs can be reduced by 20 to 30 percent through the use of classic efficiency levers combined with RPA and AI.

"G&A costs can be reduced by 20 to 30 percent through the use of classic efficiency levers combined with RPA and AI."
Portrait of Fabian Huhle
Senior Partner
Munich Office, Central Europe

Digital technologies not only affect the tools companies use these days. They also impact the way in which efficiency projects are conducted today. Automation sprints, for example, can be used to automate selected repetitive activities right at the start of an optimization project. This means that results can be seen within weeks and creates a higher level of acceptance among employees. Innovative working formats, such as boot camps and workshops in an inspiring setting like our Spielfeld digital hub, help foster creative ideas and enable communication and networking between startups and established companies. And our digital roadmaps offer exclusive insights into what leading DAX companies are doing in the field of overhead efficiency, thereby helping business leaders quickly identify suitable technology solutions for their own activities.

The extended range of efficiency levers at their disposal gives companies new possibilities to meet the growing demands they face while continually minimizing their costs. They also support a business's cultural transformation into a digital company. There are many good reasons to act now.

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Overhead efficiency: Cutting costs and rethinking functions

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Overhead functions like Finance, Human Resources and IT add value – but they come at a price. Depending on the industry, between 5 and 15 percent of a business's total costs are general and administrative (G&A) costs. Applied in combination with proven tools, cutting-edge technology now offers new solutions.

Published March 2019. Available in
Further reading
Portrait of Andreas Stocker
Partner
Munich Office, Central Europe
+49 89 9230-8506