When it comes to cutting costs, support functions often get overlooked. Their inefficiencies are not simply “lying around on the shop floor,” for everyone to see, says Reinhard Messenboeck, a partner and managing director with the Boston Consulting Group. And while support functions often are viewed as ancillary, they actually reside “close to the decision makers.” A board typically controls an organization through support functions such as HR, finance and the budget process. They are “the brain and nervous system of an organization.”
In this two-part Knowledge@Wharton interview, Messenboeck provides a wide-ranging look at where support functions typically stumble — by building unnecessary layers of management or controls, or by losing sight of key goals. Typical savings that can be wrung out of support programs — with the right approach — often reach 25% to 30%.
Part I looks at how inefficiencies crop up in support functions within organizations: “No one creates inefficiencies on purpose. These things grow over time.”