Efficient company headquarters: Our Elevate approach in 4 steps

For many companies, it is becoming more difficult to pursue strategic priorities and sustainably increase profitability. This is due to many factors. One reason is the challenges that have increased in recent months. These include the shortage of skilled workers, rising personnel costs, high interest rates and inflation, fragile supply chains, the limited availability of raw materials and geopolitical crises.

In order to remain competitive, it is essential for companies to ensure efficient and lean support functions. The optimization of the organizational structure and the reduction of costs in the administration and management of the company, especially at the company headquarters, play an important role in this. This is known as G&A rightsizing (general and administrative). With the Elevate approach, KPMG offers a solution for identifying, quantifying and implementing the greatest potential for optimizing support functions. By optimizing support teams, processes can be harmonized and standardized, costs reduced and inefficiencies eliminated. The result is higher profitability for the company and more freedom to focus on strategic goals.

The Elevate approach comprises four steps

Establishing the baseline

This involves a detailed analysis of key personnel and financial figures, such as headcount. This creates transparency about employee structures. The analysis of current G&A expenditure enables companies to identify optimisation potential and formulate well-founded targets.
Comparability by means of benchmarking

We distinguish between two types of benchmarking: Competitor benchmarking compares the G&A costs of your own company with those of competitors. In functional benchmarking, individual key figures (e.g. expenditure in the area of finance) are compared with industry benchmarks. The results can then be used to derive opportunities for improvement in order to optimise processes within the company.
Analysing the spans and layers

This analysis makes it possible to derive an appropriate organisational structure. This includes the management spans and the number of management levels (layers). In an ideal company structure, the management span per manager is nine to 14 employees. At the same time, the number of management levels should only be as high as absolutely necessary. In practice, however, the picture is often different. While the number of management levels is usually too high, the management span per manager is too low.
Design of zero-based budgeting

This is an important step in the process of organisational optimisation, as this approach enables long-term cost savings and the strategic redistribution of existing resources by discontinuing inefficient work processes. The overarching question: How would a function be reorganised if it didn't already exist? With the help of the green field approach, a comprehensive concept of the organisational structure can be drawn up. These findings are then compared with the current situation, resulting in potential savings.