Insurance, marketing, IT and finance costs hide double-digit savings in most mid-market companies. Here is how a structured diagnostic finds them.
No CFO believes their company is overspending - until the diagnostic ends. Across engagements, the pattern is remarkably stable: a mid-market business that has grown steadily for a decade is carrying 10 to 20 per cent of addressable cost that serves no strategic purpose. Not because anyone was careless, but because costs are negotiated once and then renewed forever.
The four leakage zones
Insurance is the quietest one. Policies stacked over years overlap in coverage, sums insured drift away from actual asset values, and premiums are renewed with the same intermediary without a market check. A structured re-broking exercise routinely saves 15 to 30 per cent with identical or better cover.
Marketing cost hides its leakage in retainers and renewals - agencies billing for scopes that shrank years ago, tools with licence counts frozen at a headcount the team no longer has. IT cost leaks the same way: unused licences, over-provisioned cloud, support contracts on hardware that was retired. Finance cost - bank charges, forex spreads, processing fees on facilities - leaks in fractions of a per cent that compound into real money at scale.
How the diagnostic runs
Phase one is forensic: twenty-four months of ledgers, contracts and invoices across the four zones, benchmarked against our database of comparable businesses. No interviews yet, no opinions - just the gap between what is paid and what the market pays. Phase two ranks every gap by savings size, implementation effort and business risk, because a saving that disrupts operations is not a saving.
Phase three is execution, and this is where most internal cost programmes stall: renegotiating with incumbents, re-broking, consolidating vendors, cancelling the truly dead weight. It is uncomfortable, relationship-heavy work - which is exactly why an external team with a mandate finishes it and an internal committee often cannot.
Why success fees change the outcome
We run these programmes substantially on success fees: a share of savings actually banked, measured against the baseline we documented in phase one. The alignment does two things. It filters out theoretical savings that never reach the P&L, and it keeps us in the engagement through implementation - because until the saving is real, neither is the fee.
An optimal and sustainable cost position is not a one-time crash diet; it is a repeatable discipline. Run the diagnostic, bank the savings, and put renewal-date discipline in place so the leakage never rebuilds. The second diagnostic, two years later, should find almost nothing. That is what success looks like.
Written by
Paramjeet Singh
Writing field notes on finance, tax, process and infrastructure - from the work, not about it.
