Reducing costs: how to start out winning?

26 February 2014

In a complex project, everything is decided at the start. Choosing designs, functions and the system or product architecture will determine incontrovertibly in advance the major dimensions of the project, in particular when it comes to costs. We estimate that 80% of costs are set in stone by decisions made in 20% of the time. The playing field of economic optimisation is considerably reduced. In a large majority of cases it is for this 20% that we are going to “fight”, through cost-reduction, cost-killing and cost-cutting campaigns; we cut, we reduce and sometimes we even amputate.


And to what end? Are we sure that we haven’t amputated the real client value? And what if the correct approach was to use a procedure that gave us, at the start, the resources to reach our goals, rather than reduce costs when it is already too late?


Today there are very powerful resources that exist to get us there.


Design-to-cost is one part of these resources. In this approach – this management mode, this way of thinking – cost represents input data and not a result. The challenges thus involve designing in a different, more creative way, by freeing constraints according to need. We must avoid escalation of services, to arrive at the precise solution that our clients expect.
Much more than a simple methodology or tool, design-to-cost is a real paradigm shift that requires a change in the attitudes and behaviour of project teams.
Its implementation may well call for an efficient organisation and management, but the results are often remarkable, with respect to products and services and team efficiency.


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