Direct and Cost-Avoidance Savings Solution

Over the past few years, one of Allegis Global Solutions’ (AGS) clients, a leader in the construction machinery and equipment industry, tasked us with helping them realize aggressive cost savings goals. Starting with a $6 million goal in 2012, their target goals climbed substantially to $10.8 million and $10.7 million in 2013 and 2014 given global economic conditions were directly impacting their inventory. As such, AGS needed a way to calculate cost savings, beginning from when the managed services program (MSP) went live to its current state, in order to determine how to sustain cost savings throughout the life of the program.

By working closely with our client, AGS was able to develop five methods for controlling costs. From there, each savings methodology was classified as either a direct savings initiative or a cost avoidance one.

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