You Cost Too Much!
how to ensure fair comparisons to benchmarks and outsourcing

Speech Abstract

Clients claim that you cost too much. But you know that your staff are competent and hard working, your spending is frugal (perhaps even too much so), and there's no fat left to cut. Perhaps your processes could benefit from some improvement, but you're not all that bad!

In a similar vein, if you allocate your costs, clients may claim you unfairly overcharge their business units while undercharging others. Funny, how can they all think that?

Clients who feel that you're too expensive may just make noise; they may demand benchmarking studies; or they may even advocate decentralization or outsourcing. In any case, mistrust and strained relations are unhealthy, and the lack of client support may affect your next budget.

Accusations of excessive costs are rarely grounded in facts. They're usually the result of a lack of cost transparency, or vague linkages between costs and the value delivered. Costs may be assigned to big bundles of deliverables that clients can't control, or include extraneous deliverables (like corporate-good activities) which aren't calculated into competitive benchmarks.

The antidote is to link all your costs to the products and services that clients choose to buy, with a completely transparent cost model.

This session will explain how to define a meaningful products/services portfolio; what should (and should not) go into the calculation of the full cost of those products/services; and how to implement a planning process that produces a transparent budget and rates.

100-word version....

50-word version....

Outline

• Why feelings that you cost too much damage an organization

• The antidote: transparently linking all costs to your internal products/services

• How to define your products and services to create perceived value

• What "full cost" includes

• A step-by-step process for service portfolio definition, business planning, budgeting, product/service costing, and rates