Sometimes, companies begin to view their expenses as normal and necessary for the operation, forgetting the opportunity for optimization potential through proper management. Some reasons include:

• Lack of planning on spending budget without calculating the estimated amount by item.
• Lack of proper allocation of expenditure by the cost center, resulting in inadequate control and measurement.
• Failure to assign responsibility for the control and management of each category of expenses.
• Absence of an organizational culture focused on rationalization of expenditure.
• Lack of feedback, lack of knowledge of the opportunity areas and how each employee can impact the improvement actions.
• Reactive and late behavior to the breach of the expenditure budget, once they have already executed it.

Hence, London Consulting Group supports its clients to identify areas of opportunity to optimize costs which can be controlled. Together, with their personnel, we define and implement actions to rationalize.

We analyze how these expenses are hired or incurred, which ones are sub-accounts, what triggers the consumer, who authorizes the expenditure, product or service providers, and current conditions of the agreement, amongst others. Later, we identify the four rationalization alternatives:

• Elimination.
• Restriction.
• Negotiation.
• Replacement.