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Overhead Cost Management & Reduction
Shine a spotlight on overhead expenses and identify opportunities to cut or optimize support costs without harming operations.
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Dashboard shown is a conceptual example. Keboola integrates with any BI or analytics platform.
Overview
SG&A expenses creep up an average of 1-2% annually in most organizations, often outpacing revenue growth and quietly eroding margins until a crisis forces drastic, poorly targeted cuts. This use case analyzes and controls indirect expenses – office costs, utilities, travel, marketing, IT overhead, professional services – basically any cost not directly tied to producing goods or delivering core services. It helps CFOs and controllers break down overhead by category, department, and benchmark against revenue or other drivers, seeking areas where costs are higher than they should be.
With Keboola, trend these costs, compare them to budget or external benchmarks, and simulate savings scenarios: "what if we cut travel by 20% and consolidate software subscriptions?" This is especially valuable in complex companies where overhead can grow unnoticed and periodic cost reduction initiatives become necessary.
The result: data-driven cost management that identifies inefficiencies before they require emergency across-the-board cuts that damage strategic capabilities.
Your Challenges
Gradual Bloat in SG&A
Overhead grows incrementally and gets less attention than direct costs. Without analysis, companies wake up to find SG&A as percentage of sales way above industry norm or past levels, squeezing margins.
Lack of Accountability
When overhead costs aren't transparent, department heads don't feel accountable to manage them. Multiple departments might use separate software tools doing similar things, duplicating costs, but no one has a cross-department view to flag consolidation opportunities.
Cutting the Wrong Costs
In downturns, companies resort to across-the-board cuts ("everyone reduce budget by 10%") because they lack insight into which overheads are non-essential versus critical. This hurts long-term competitiveness if important activities (certain marketing initiatives, employee training, customer service) are slashed while wasteful ones remain untouched.
Missed Efficiency Gains
Overhead includes processes often streamlined with technology or process changes (automating invoice processing to reduce finance overhead, renegotiating service contracts, consolidating vendors). Without analyzing cost structure, these opportunities never surface.
Our Solution & Value
Detailed Overhead Breakdown & Dashboards
Keboola aggregates all overhead costs into standardized categories (rent, support staff salaries, professional services, subscriptions, travel, utilities) across the organization. It presents this per department or cost center, showing both amounts and as % of revenue or per headcount. This identifies outliers: "Why does Department A have twice the software subscription cost per employee than Department B?"
Benchmarking & KPI Tracking
If benchmarks exist (industry data or internal targets like "overhead should be 20% of revenue"), the platform tracks performance against them, showing which costs are off benchmark and prompting deeper dives. Internal benchmarking compares similar units – if you have multiple regional offices, compare their overhead per capita.
Identifying Quick Wins
The system highlights specific expense lines that grew unusually or look high relative to output. A spike in "Telecom expenses" gets flagged if unexplained by company growth. It sorts and shows top 10 overhead line items by absolute spend or growth rate. Maybe "Consulting fees" is high – spurring examination of whether contractors can be reduced by hiring or if projects ended.
Scenario Simulation for Cost Reduction
Keboola easily runs scenarios: "if we cut travel by 30%, reduce training by 10%, and renegotiate facility contracts to save $X, what's the new overhead %?" This helps plan cost initiatives with data. It integrates with headcount planning – if considering layoffs or hiring freezes, simulates the impact on overhead and overall margins, ensuring you don't cut beyond operational ability.
What systems can you connect?
Example Outputs
[stakeholder] CFO
- Overhead dashboard summarizing total SG&A vs budget and vs last year, broken into major buckets with variance. Pie chart of overhead by category visualizing where most money goes (typically staff, then rent, IT). Key KPI like SG&A as % of revenue or per FTE, trending over time and compared to target or peers. List of any categories that grew faster than revenue by significant margin (e.g., "Travel +25% vs revenue +5%") allowing pointed questions at review meetings.
[stakeholder] Department Head (IT or HR Director)
- Detailed expense report for their function showing sub-category breakdown (for IT: hardware, software licenses, cloud services, personnel, contractors, telecom). Actual vs budget with clear variances. Unit cost metrics like "IT cost per employee supported" trending – helpful for justifying budgets or finding efficiency targets. HR might see "Training cost per employee" trends. Having these visualized motivates proactive budget management rather than year-end reactions.
[stakeholder] Controller/FP&A
- Cost optimization opportunity list: "Contracts coming up for renewal with high spend – top 10 vendor contracts by expense to review," or "Areas with budget underutilization – maybe budget can be reduced in the next cycle."
FAQs
How do we incorporate qualitative factors? Some overhead like R&D or marketing isn't purely "bad" cost.
Not all overhead is equal – some are strategic investments (R&D crucial for future products, marketing building brand). The system can differentiate by labeling costs as discretionary vs strategic vs mandatory. Management decides how to treat them, but data still helps – showing R&D as % of revenue vs industry average, or marketing ROI metrics. Integrate outcomes: marketing spend vs sales growth to argue efficiency rather than pure cuts. The goal isn't indiscriminate cutting, but shining light so choices are intelligent. With scenario tools, you might spare or increase R&D while cutting admin instead, and see the effect. While numbers identify potential cuts, human judgment decides based on importance. You can attach KPIs like new products launched per R&D dollar, or market share vs ad spend to measure effectiveness. This ensures you're examining cost vs value, not cost in isolation – more complex but prevents cutting muscle along with fat.
Can we track one-time vs recurring overhead expenses?
Yes, we flag one-time costs (big legal settlements, relocation expenses). Overhead analysis can exclude one-offs for baseline tracking – often done in controlling by adjusting for unusual items to see underlying trends. If tagged in accounting (or via rules like special project codes), we easily separate them. Even without tagging, large outliers are detected by variance analysis and can be labeled manually in the data model for future reference. Output includes "excluding one-offs" view for planning purposes. This ensures overhead reduction focuses on recurring savings, not just benefiting from one-time fluctuations. Similarly, simulate adding back expected one-times next year (like known expenses for office moves) so budgets account for them. Having the platform manage these adjustments structurally beats ad-hoc Excel adjustments every time.
Related Use Cases
AI tools fail when they don’t connect to your real data or respect production workflows.
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