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Develin & Partners

Develin & Partners is a UK-based management consultancy founded in 1988. We specialise in cost management, helping our clients understand the nature and behaviour of their costs. This enables them to control costs better, and so improve profitability and shareholder value.

Some costs are good, because they pay for facilities, equipment and activities that generate profit and create value. Other costs are wasteful, or destroy value. It is not difficult to cut costs, nor to improve customer service. It is difficult is to do both at the same time. The answer is to differentiate between good and wasteful costs, converting the wasteful to the useful, which is what we do.

We help our clients use their resources more effectively – through process improvement, through performance measurement and management, and through organisational restructuring.

In many organisations the budgeting process is a time-consuming and meaningless distraction. We transform it into a flexible, continuous process, a support tool that managers find essential. It becomes the vehicle that carries the change plans of the organisation, allowing progress to be tracked. And it delivers fast, accurate assessments of resource needs as circumstances change.

Gross margins can mask heavy internal costs and are therefore often a dangerously misleading measure of profitability. We identify net product and customer profitability, so our clients know what business is genuinely profitable, and what is not.

We help our clients manage change by identifying and removing obstacles to progress, and by engaging people at all levels in the process of improvement.


Contacts:

Develin & Partners
Ash House, Fairfield Avenue, Staines,Middlesex, TW18 4AN
tel: 01784 224207
fax: 01784 224315
email: info@develin.co.uk
web: www.develin.co.uk

Booklets on business improvement approaches and case studies outlining their implementation in various sectors are listed on our web site. They can be ordered free of charge via the Enquiry page.

Services:

• Activity Based Costing and Management

• Better budgeting

• Business Process Improvement

• Overhead Cost Management and Reduction

• Performance Measurement & Benchmarking

• Shared Services

• Unlocking value through IT


Activity Based Costing and Management:

Not unreasonably, people assume that activity-based costing is a technique of costing based on activities. Although this is true, the name is highly misleading. Why? Because activity based costing as a technique can be used to provide a wide range of information that enables managers to achieve many important goals: improved customer, service and product profitability; cost reduction; process re-engineering; capacity management; continuous re-forecasting and budgeting. That's why we term our service activity based costing and management.

• We advise clients on how to apply activity based costing techniques to give maximum leverage on the business performance

• We help build cost models that deliver the needed management information

• We demonstrate to managers that the information that the cost model provides is correct, valid and dependable

• We ensure that a structure exists for refreshing and developing the model so that it continues to serve the company after we have gone


Better budgeting:


The annual budget is meant to be an essential mechanism for planning and controlling corporate revenues and costs. It is usually the main, and in many instances the only significant formal mechanism for controlling the activities of employees. Does it do its job?

No. In most organisations the annual budgeting process consumes an extraordinary amount of management time, and produces something whose credibility is minimal.

Many companies could improve their budget process beyond recognition, turning it into an indispensable management tool. Our work for clients includes:

• assessing the effectiveness of the existing budget process, identifying problems and advising how improvements could be made

• introducing a process of rolling re-forecasts, concentrating on those costs and revenues that vary regularly and are material

• helping to identify the activities that drive the strategy, making sure they are properly resourced and their results tracked

• identifying costs that are linked to business volumes, and so develop a budget model that enables rapid re-forecasting

• introducing a process by which managers account for their performance every period; differentiating between what is and isn't within their control and assessing their performance against relevant measures, not just costs and revenues


Business Process Improvement:

Business process improvement embraces two disciplines. The first involves redesigning processes so as to reduce costs and/or improve the service the process gives. A variety of techniques are used: improving the use of systems; altering the procedures and routes that processes take through the organisation; and redefining internal service levels in the process.

The other discipline is process management. In large, important processes, there will be several managers who between them control the various resources involved in the process. How do they resolve process problems and jointly seek process improvements? In many organisations, there are no formal ways in which processes improve: it is left to chance, and the goodwill of individual managers who are not assessed on process performance.

•We help clients define their processes and specify how they work

•We undertake internal and external customer needs surveys to determine whether processes deliver what is required

•We redesign processes so as to reduce costs and improve service

•We advise clients on management mechanisms by which processes can be effectively managed and improved


Overhead Cost Management and Reduction:

It is always difficult to gauge whether the overhead areas of a company are giving good value for money. This is because much of what they do is not directly visible to others. If the service they give falls, or if overtime increases, or if the backlog of work rises, managers in the overhead areas will bid for more resources to tackle these problems, which are usually symptoms of a volume increase. But when volumes fall, managers seldom argue that they are over-resourced. This results in ‘invisible’ spare capacity in the overhead.

• We identify the activities and outputs of the overhead areas and estimate the resource needed to accomplish each one. We determine what influences the volumes of activities and outputs the overhead areas have to tackle

• We use our experience of best-practice and our benchmarking skills to assess whether each activity and output is adding value and is being carried out effectively. We advise on better methods, and identify the savings that could be made by adopting them

• We bring together all this information to build a model that predicts resource requirements using best practice and as circumstances change. This provides the means for the company to manage the overhead and reduce its cost


Performance Measurement & Benchmarking:


In terms of performance measures, it is either feast or famine. Famine occurs when financial measures are the main or only criteria for monitoring progress and decision-making. Starved of non-financial information, managers are denied the means of assessing and improving operational performance. Feasting occurs when organisations get messianic and measure everything, the humdrum along with the critically important

Benchmarking is an enticing concept, but takes much more effort than the unwary expect. That's why it is so expensive to buy comparative data from benchmarking companies. But uncovering the right information can prove an invaluable spur to dramatic performance improvement

• We build performance measurement systems that focus on those aspects of performance that support strategic objectives. We help everyone understand their role in achieving those objectives

• We advise clients on developing effective mechanisms for measuring performance, for assessing the measurements they take and for deciding what actions are needed

• We establish benchmarking programmes, advising our clients of the most suitable approach from the many that can be used

• We collect and analyse benchmarking data to identify priorities for change and improvement opportunities


Shared Services:

Large organisations often agonise over whether to centralise internal services, and usually end up regretting whatever choice they make. If they centralise to save costs, they spend more in management time trying to sort out the inadequate service they receive than they gain in savings. If they decentralise in order to give business units or divisions a more focused, tailored service, business unit profitability becomes unacceptable.

•We have developed a structured method that establishes objectively the optimum solution to the centralise/decentralise conundrum. Apart from giving the right answer, this approach reduces the emotion of the debate because the issues are made explicit and are quantified

•We design the processes in Shared Services to accommodate both the volume and service levels that different units require

•We analyse process costs in order to calculate the unit costs of providing the volume/service level combination that users require

•We facilitate cost and service level negotiations between Shared Services providers and users to achieve transparent, mutually-acceptable deals


Unlocking value through IT:

For most companies, IT is essential for them to be cost-competitive and to provide basic levels of service. Indeed, IT's importance to most businesses continues to rise, with the emergence of new technologies such as the internet and e-commerce.

In stark contrast to IT's importance, the IT department in many companies is viewed as a pariah, the least understood and the least valued of functions. It is often criticised by line managers for its rising costs, its unacceptable levels of service, its inflexibility, slow response to business change and its poor support of business strategy. For businesses to be successful in the future, these views, and the behaviours, processes and procedures that inspire them, must change.

• We analyse and align the IT and information systems strategy to the needs of the business

• We help make the business case for IS/IT investment

• We assess IT department skills and advise on organisational structure

• We assess IT project risk and portfolio risk

• We evaluate software and hardware

• We model IS/IT costs and develop cross-charging/pricing strategies

• We benchmark performance and evaluate outsourcing or sub-contracting options



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