SG&A TRANSFORMATION

The SG&A Reset: Taking Four Points of Cost Out Without Taking Capability Out

Client: A $2B diversified industrial company

with SG&A running well above peer median [VERIFY PROFILE]

Function-level SG&A cost compression
against Hackett Digital World Class median
Baseline (Pre-Transformation)
Post-Transformation
-4.5 pts
Finance
-4.0 pts
HR
-4.8 pts
Procurement
-3.1 pts
IT Admin
-4.1 pts
Total SG&A
SG&A Cost as % of Revenue

The challenge

Years of acquisitions had left the company with duplicated back-office functions, five ways to process an invoice, and SG&A several points above peer median. Previous cost programmes had cut heads without cutting work — so the cost crept back within eighteen months, every time.

Why it held

The work was removed, not just the people. Because every saving traced to a retired process variant or an automated step, there was nothing for the cost to grow back into.

What Prime did

Outcomes

+5%

EBITDA improvement Published

−4.1 pts

SG&A as % of revenue [VERIFY] Engagement figure

62%

Process variants retired [VERIFY] Engagement figure

20–25%

Function cost reduction potential at full run-rate [TARGET] range

Hackett Group Digital World Class research shows top-performing organisations operate SG&A functions at substantially lower cost as a percentage of revenue than the peer group; the [TARGET] range is set at the lower-to-mid band of that gap.

HACKETT
GROUP
WORLD CLASS DEFINED AND ENABLED
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