Diagnosis and vision of Support Functions

Adapt support structure to the needs of the company

The first stage of a Selling, General & Administrative Expenses (SG&A) optimization initiative is to perform a diagnosis of the existing situation, in order to identify levers for the improvement of SG&A performance and efficiency. Structure and support function target organization models should then be reviewed to overcome any operational and strategic challenges.

The diagnosis is performed in four stages:

1. Defining the SG&A concept by adopting a process-specific approach, which separates:

  • Governance activities (group, strategy)
  • Direct operational support activities (front office)
  • Expertise activities (middle office)
  • Transaction activities (back office)

2. Establishing a process-specific external and internal efficiency benchmark for SG&A (full-time equivalent, cost, and quality)
3. Collecting feedback and expectations from operational management and identifying any challenges
4. Identifying process-specific performance levers:

  • Governance
  • Structure
  • Shared Services
  • Location of resources
  • Standardization of processes
  • Automation of activities
  • Simplifications (rules, tasks, data repositories, procedures, etc.)
  • Skills and expertise
  • Business Process Outsourcing

Following the diagnosis, it is necessary to develop a vision of the target organization by capitalizing on performance and efficiency levers, while integrating the features and challenges of each function. For example:

  • Human Resources (HR): successfully standardizing and centralizing the expertise required for performance and efficiency, while improving HR’s proximity to staff
  • Finance: effectively producing financial and statutory information to the best quality standards, to ensure the function is focused on operational and strategic challenges
  • Legal: optimizing the use of external expertise
  • Procurement: considering category-specific procurement performance levers to implement the relevant organization (for example, expanding certain procurement categories)
  • Marketing and Communications: optimizing outsourcing expenditure budgets
  • Sales: improving sales performance to maximize revenue and margin
  • Information Technology (IT): seeking to optimize running costs through new technology (e.g. cloud) and offshoring; controlling IT project investment requests to improve Return on Investment (ROI)
  • Real Estate: optimizing the real estate portfolio (cost and use)
  • Fleet Management: optimizing costs

During the vision diagnosis and development process, it is essential to coordinate operational and functional management to prepare for the implementation phase. We strongly recommend exploring the disruptive models used in other environments. Thanks to Argon Consulting’s independence, SG&A project experience, and functional expertise, it is able to support its clients in finding the right solution for their organization to overcome its operational and strategic challenges.

Case Studies

Implementation of a “Lean Office” approach to improve the management of admistrative tasks (2000 people concerned)