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Invest to cost

Olivier Brongniart, Associé co-fondateur - Président de CostHouse How to improve cost-efficiency of capital investment projects and keep them alive in a cash limited environment ...

Olivier BRONGNIART
President and founder
, Cost House France

 

Optimizing capital investments is key to a company's global value. Capital expenditures have direct and long-lasting impact on P&L, balance sheet and key performance ratios such as ROIC (Return on Invested Capital). In addition, such investments contribute to a company's social and environmental legacy on matters like working conditions, energy savings or emission control.

Investment projects are usually managed as a succession of tasks carried out by independent actors. Such projects tend to run late and over budget. Without a strong grasp on time and cost, estimates by various contributors change constantly along the project cycle.

Cost House has developed a specific approach to avoid such difficulties. The "Invest to Cost" approach is based on "design to cost" and "critical chain" practices. All contributors to the project are involved from start, including potential new suppliers or contractors. Project is managed through cost, time and performance indicators shared by all, after a careful and collective review of initial estimates. The project team also performs Value analysis and builds a costing model with appropriate technical drivers to find ideas for improvement. It allows to track discrepencies and deviations from the original plan and act swiftly.

Invest to Cost projects have provided our clients with savings of 15% to 20% and on-time delivery.