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Without prejudicing short and long terms

Optimizing processes and using technology

We have carried out more than 800 projects helping companies to rethink their businesses and improve their spending efficiency

We act together with the clients, delivering average gains from 10% to 15%, reaching 40% in some cases

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Why will organizational budgeting in 2021 be different than in previous years?

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How we can help your company

Administrative Labor Expenses

Operational Labor Costs

General and Administrative Expenses

Variable costs

Budget planning and management

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Administrative Labor Expenses

Assess the efficiency of your organizational structure and team productivity

How we can help

- Organizational Structure’s review and simplification

- Identification and elimination of activities that do not add value

- Elimination of rework and redundant activities

- Centralization of functions seeking productivity improvement

- Productivity increase through process improvements supported by technology

- Adequacy of the team's level of expertise and experience

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Operational Labor Costs

Optimize your operation and prepare it for the new normality

How we can help

- Productivity increase through process improvements supported by technology

- Staffing and team’s skills optimization trough Workforce Management

- Optimization of people and equipment capacities through OEE improvement

- Routine Review by standardization and trainings supported by technology

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General and Administrative Expenses

Adjust the level of spending with focus on what is essential

How we can help

- Efficiency improvement in consumption and price levers by analyzing spending packages

- Improvement of procurement process to capture price savings

- Standardization of best practices in applying resources and spending

- Review of policies and benefits

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Variable costs

Improve process efficiency

How we can help

- Development of predictive and prescriptive models using advanced Analytics to optimize the processes

- Capacity optimization and process’ losses reduction by improving OEE supported by technology

- Optimization of maintenance processes

- Routine Review by standardization and trainings supported by technology

- Procurement process redesign to capture price savings

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Budget planning and management

Adopt the best management practices in your company

How we can help

- Adjustment of budgeting process to fit scenarios of high uncertainty

- Spending cross-control by definition of parameterized indicators in consumption and price

- Governance structuring for expenditure management

- Establishment of mechanisms for continuous assessment on resource allocation

- Decision making models developed by scenarios’ simulator

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Falconi’s methodology and expertise supported by technology

Our tool was developed to help companies in spending where matters

- Easier to prioritize the spending allocation as well as to find opportunities

- Better engagement of managers and users

- Less time spent and more in-depth analyses

How we do It

Opportunities

We identify optimization opportunities – comparing results to business benchmarks

1

Focus

2

We set the right focus based on the company’s objectives as well as on opportunities found

Engagement

We assemble work teams with Falconi consultants and client’s employees working side-by-side and we train client’s team members in our methodology

3

Refinement

4

We go deep into opportunities and thereby we refine and quantify them by making use of more sophisticated analyses

Capturing

5

We plan actions and implement the proper governance to capture the results

Culture

6

We structure the processes and mechanisms for a healthy culture of managing expenses

ABOUT FALCONI

We are the leading management consultancy in Brazil, with over 30 years of experience, recognized for its ability to help organizations generate results by improving their management system. We operate in all market segments, serving clients from the private sector and the public sphere, from Brazil and abroad.

Our priority is to deliver results.

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How many employees are in your company?

1-100

100-500

500-1000

1000-5000

+5000

Why will organizational budgeting in 2021 be different than in previous years?

We’re beginning the 2nd semester of 2020 and global business leaders are focused on defining the path to revive their companies, once the most critical phase of COVID-19 has been overcome. Faced with this scenario, we believe that 2021 budgetary planning will feature never-before seen characteristics when compared to previous cycles. Therefore, three skills should be highlighted:

i. The ability to reinvent your company to re-establish growth

ii. The ability to re-think your organization and its structure

iii. The agility to execute your digital transformation strategy throughout the year

In this context, we suggest companies take note of five points during the 2021 budget formulation, which can be constructed into the pillars under which to resume business as usual, the return to profitability and recovery of cash flow to the company.

First, the budget for 2021 will be different due to the unprecedented necessity of creativity, innovation and the pursuit of new sources of revenue. Top line budgeting should be developed with the idea of challenging the entire organization to uncover new forms of revenue generation, which may include refining customer experience, winning back lost clients, adjusting pricing strategy and policies through analysis of newly-available data, reallocation of commercial spending to sources focused on accelerated growth and the digitalization of new sales channels.

We also believe that the coming year’s budget will be underlined by the utilization of big data, considering the availability of analytical tools for the collection, processing and analysis of information, making them more accessible and useful to managers for decision-making purposes. However, due to near-term future uncertainty, advanced analytical capabilities will be necessary, but not entirely sufficient to effectively deal with this level of uncertainty. Beyond dependence on forecasting models to predict demand and consumption trends, managing your budget in 2021 will require an additional competency: the agility to evaluate what is and is not working. In other words, to act with a sense of urgency and adjust the course of the organization and budgeting efforts to adapt to a new reality.

The third point which deserves attention for the 2021 budgeting cycle is the necessity to re-think the supply chain, looking for balance amongst your mix of suppliers as well as the supply chain model. It will become necessary to not only evaluate the per-unit costs of suppliers and service providers (something practiced extensively in past years), but also to undertake “make or buy” decisions. The new operational design and that of the supply chain should be oriented toward reducing risks and future disruptions and the promoting local competencies that increase the variety of supply chain options. New technologies are already making the traditional trade-off between cost and flexibility obsolete. Challenging your budgeting process to strive for low cost and high flexibility should be your aspiration from 2021 onwards.

A fourth prominent aspect is the acceleration of digitalization of processes and services. Budgetary planning from this point forward should emphasize your company’s “digital agenda,” which should be executed throughout the first semester of 2021 and reevaluated in the second semester to track the success of digitalization through success metrics. This agenda will serve as the guide to planning and intelligent cost allocation pertaining to the following priorities:

- Revision or creation of new products and services which attend to the changing needs and consumption habits of clients;

- The use of algorithms and machine intelligence to refine operations, enabling insightful decision-making in real time

- The search for gains in productivity within the IT department, transforming what were once fixed costs into variable costs (with the rapid adoption of automation technologies and the cloud), as well as transferring resources previously dedicated to support and operations to the development of digital solutions

The fifth and final point related to budgeting in 2021 that we would like to highlight is that the process must be, like never before, highly proficient in identifying, prioritizing and proving the return on investment of spending allocated to each area and process. To promote growth and the resumption of activities, this capability will be of profound importance. Even for organizations with a primary focus on productivity, intelligently allocating spending will be an inestimable opportunity to foster enthusiasm throughout companies and reestablish themselves on the path to recovery. The challenge will not only be to reduce spending and eliminate what is unnecessary, but also to provide the appropriate funds to realign spending with strategy. It will be of paramount importance to create a culture of “reinvestment,” which stimulates and welcomes good ideas from every area of the company to be considered in the budgetary process.

We believe the five competencies mentioned above will generate consistent and lasting positive changes for the budgetary process moving forward. The constant search for intelligent spending allocation and a new model of resource management directed toward re-thinking your business and prioritizing value generation is not only for commercial enterprises, but for all of society, which will redefine what was once known as “zero-based budgeting” to simply “our way of working.”

Falconi has completed more than 800 projects supporting companies to re-think their business and improve the efficiency of their spending

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