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Publish Date

Jun 01, 2020

Pivot to Savings: How IT Can Be an Agent of Change in Cost Control for Faster Recovery

Jeff Shaffer, Managing Director

As Private Equity sponsored companies pivot to recovery coming out of the COVID-19 crisis, the chance to re-design business models and business processes are a hidden benefit. Information Technology (IT) will be an agent of change, playing a significant role in cost controls and process re-design. A key element of this re-design will be companies’ ability to reduce fixed commodity-type process activity costs and replace them with automation in a variable, consumption-based model. With human capital identified as the largest expense for most companies, automation provides a mechanism to control this cost while not wrestling away value-added activities. What is different today versus prior situations is that benefits can be achieved with minimal upfront cash.

Before companies can take advantage of an automated variable consumption-based model, they need to get their house in order. At A&M, we see a stair-step approach for IT to lead and support the move to the “next normal” (born of the COVID-19 crisis) and encompass the three steps of remediation, data transparency and “Hyperautomation”.

Read the full article to learn how technology automation tools can drive cost controls for companies re-assessing their operations overhead.

Authors

Jeff Shaffer

Jeff Shaffer

Managing Director

Jeff Shaffer is a Managing Director with Alvarez & Marsal Private Equity Services in Los Angeles. He works in the Operations Group and specializes in pre- and post-acquisition operations assessment and integration. Mr. Shaffer’s primary areas of concentration are post-merger integration, carve-out planning & execution, due diligence, IT strategy, systems integration, and interim management.

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