The support, commercial and central functions are critical to the effective running of a company. These include, but are not limited to, finance, HR, trade and marketing, procurement, R&D and IT. Beyond operational support, these functions contribute to the development of the company, its performance, sometimes its strategy, and compliance for the most regulated functions. According to our benchmarks, the total cost of these functions, commonly known as SG&A (selling, general and administrative expense) is generally between 6% and 20% of turnover, depending on the sector and the functions’ maturity. 

If a reduction in SG&A expense improves a company’s profitability, it is the quality of services delivered that creates value: the quality of financial performance management by finance, talent management by HR, optimisation of supplier relationships by procurement, innovation by R&D, increased productivity through IT systems, and in particular sales generated by the marketing and sales teams. 

When looking to increase its competitiveness, the challenge for a company is to optimise its SG&A structure having previously agreed its service offering and improved performance through digital initiatives and pooling resources.

Get in touch

Bertrand Allard

Partner

Phone +33 (0)1 55 46 13 00

Email sga.france@argonandco.com

Get in touch

Crispin Mair

Partner

Phone +44 (0) 845 644 6972

Email sga.uk@argonandco.com

SG&A case studies

SG&A Cost Optimisation: Global leader in building materials industry

SG&A Cost Optimisation: Global leader in building materials industry

SG&A Cost Optimisation: Global leader in building materials industry

The client is a global leader in the building materials industry.

Facing a difficult business context and fierce competition, the Group decided to launch a SG&A project with an objective of 10% SG&A cost reduction.

 

Our role

  • Define the SG&A cost baseline and get alignment on a common definition of SG&A
  • Challenge the SG&A budget by identifying all improvement levers
  • Make recommendations on most relevant actions to achieve the 10% SG&A cost reduction target, according to the range of benefits and feasibility of implementation
  • Provide benchmarks on competition and insight on potential evolutions of SG&A organisations to increase efficiency and effectiveness

Results

  • Identified SG&A cost reduction of 10M€
  • Delivered documented action plan, approved by the ExCom
  • Produced SG&A target organisation design
  • Completed a detailed HQ relocation study

Post Merger Integration of Central and Support Functions: Food & Drinks Industry

Food & Drinks distribution

Post Merger Integration of Central and Support Functions: Food & Drinks Industry

Our client is a leader in selling, marketing and distributing food and non food products to restaurants.

In the context of the merger of two groups of equal size, the objective was to define the integration plan to create the industry leader and deliver synergies.

The scope included all central and support functions: finance, HR, marketing, procurement, customer services, QHSE.

Our role

  • Map headcount and FTE of all support functions
  • Estimate integration synergies of support functions and compare them with industry benchmarks
  • Build scenarios of evolution of support function organisation with the CEO in line with the company strategy, and assess them to make a recommendation
  • According to new organisation directions, redefine missions and design detailed target organisations of all support functions, in line with synergy targets

Results

  • Validated new company organisation model with the CEO
  • Validated new missions and target sizing of all support functions with functional leaders and Excom
  • Identified synergies of 20%
  • Produced transformation plan for each function
  • Conducted an HQ relocation study
  • Performed an impact assessment

Knowledge transfer: global biopharma

Knowledge transfer: global biopharma

Bristol-Myers Squibb (BMS) is a global biopharma company focused on delivering innovative medicines to help patients fight serious diseases.

The business has set up a new capability centre for Europe based in UK. The new centre handles business and financial service activities including order to cash, accounting, procurement, HR and IT. There was a significant number of new joiners needing training and onboarding.

 

Our role

  • Develop a knowledge transfer and training programme to onboard 180 new starters
  • Capture knowledge from over 15 different markets to transfer to the above market capability centre
  • Track the knowledge transfer progress across all learners
  • Create an experience that would build a “capability centre” culture and reflect BMS values

Results

  • “Soft launch” with new starters trained to ramp up services before the official go live date
  • Onboarding programme rated as outstanding with training packs developed by Argon & Co cited as “Excellent”
  • Knowledge transfer framework applicable to any service migrating to the capability centre