This third part relates to some suggestions on KPIs that can be established when a company is conducting a cost awareness or effectiveness exercise.

Some suggestions are:

1.Targeted Cost Reduction

• Each department tasked with identified suppliers/costs and % Y-O-Y tasked to reduce
• Key Performance (Cost) Indicators (KPI)
• Periodic Tracking and Review 

2.Leverage on commonalization of suppliers base

• Target 2/3 suppliers for common products and services

3.Return on Investment (ROI) on all cost outlay

• Cost Trade-Off Analysis
• Whether it is a profitable option
• ROI Impact Analysis

4. Propagate to All Operating Managers On spending “constructively or effectively”

• Have the mindset right by asking what if the money is yours and how would you like to spend it effectively?

5. Reward Achievers

• Yearly Bonus Matrix (With Achievement Multiplier Factor)

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Related Entries

• Steps/Procedures In A Costs Awareness/Effectiveness Exercise ( Part 2 of 4)
• Cost Effectiveness – Introduction ( Part 1 of 4)
• Credit Management:What is the KPA and KPI of a Credit Manager?
• KPA/KPI: Identifying Your “Customer”
• Financial Planning as One of The Key Finance Roles (Part 1)