{"id":503,"date":"2016-05-17T20:55:35","date_gmt":"2016-05-17T20:55:35","guid":{"rendered":"https:\/\/threesconsulting.com?p=503"},"modified":"2021-01-26T12:53:43","modified_gmt":"2021-01-26T17:53:43","slug":"should-cost-modeling-for-services-spend","status":"publish","type":"post","link":"https:\/\/threesconsulting.com\/should-cost-modeling-for-services-spend\/","title":{"rendered":"Should Cost Modeling for Marketing and Services Spend"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"503\" class=\"elementor elementor-503\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-58d5666 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"58d5666\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-cb5b033\" data-id=\"cb5b033\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-8989663 premium-header-inline elementor-widget elementor-widget-premium-addon-dual-header\" data-id=\"8989663\" data-element_type=\"widget\" data-widget_type=\"premium-addon-dual-header.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\r\n\t\t\t\t\t<h2 class=\"premium-dual-header-first-header \"><span class=\"premium-dual-header-first-span\">Should Cost Modeling for Marketing and Services Spend <\/span><\/h2> \t\t\r\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-8160f28 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"8160f28\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-3cf572e4\" data-id=\"3cf572e4\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-66288016 elementor-widget elementor-widget-text-editor\" data-id=\"66288016\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.21.0 - 18-04-2024 *\/\n.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block}<\/style>\t\t\t\t<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignleft wp-image-11605\" src=\"http:\/\/woocommerce-544201-1745766.cloudwaysapps.com\/wp-content\/uploads\/2021\/01\/thinkstockphotos-469024590-b-1024x827.jpg\" alt=\"\" width=\"500\" height=\"404\" srcset=\"https:\/\/threesconsulting.com\/wp-content\/uploads\/2021\/01\/thinkstockphotos-469024590-b-1024x827.jpg 1024w, https:\/\/threesconsulting.com\/wp-content\/uploads\/2021\/01\/thinkstockphotos-469024590-b-600x485.jpg 600w, https:\/\/threesconsulting.com\/wp-content\/uploads\/2021\/01\/thinkstockphotos-469024590-b-300x242.jpg 300w, https:\/\/threesconsulting.com\/wp-content\/uploads\/2021\/01\/thinkstockphotos-469024590-b-768x620.jpg 768w, https:\/\/threesconsulting.com\/wp-content\/uploads\/2021\/01\/thinkstockphotos-469024590-b.jpg 1200w\" sizes=\"(max-width: 500px) 100vw, 500px\" \/><\/p><p>Should Cost analysis determines what a product should cost based on materials, labor, overhead, and profit margin.\u00a0 The tool was initially developed by the Department of Defense (DoD) to assist procurement officers with determining fair and reasonable pricing.\u00a0 It was later embraced by the commercial industry and is now widely used for product costing and teardown analysis.\u00a0\u00a0 The use in services sourcing continues to be limited.<\/p><blockquote><p>3S Consulting has been using Should Cost modeling for complex service categories like marketing, production, professional services, R&amp;D, facilities, transportion, and others. You can think of the approach as reverse engineering supplier pricing assumptions to negotiate better outcome or lower costs.<\/p><\/blockquote><p>The goal of the modeling effort is to \u2013<\/p><ol><li>Identify the underlying cost drivers<\/li><li>Optimize them to deliver better business outcomes while reducing costs<\/li><li>Negotiate a win-win arrangement<\/li><li>Operationalize a sustainable agreement<\/li><\/ol><blockquote><p>While the emphasis is on cost-cutting, we believe an equally important objective is to improve performance and service.\u00a0 At 3S Consulting, our Should Cost modeling effort identifies areas where costs can be redirected to improve our clients&#8217; overall operations.<\/p><\/blockquote><p>Our team uses the Should Cost modeling tool to run open book negotiation with providers, focuses on developing a win-win solution, and reduces negotiation time by as much as half.\u00a0 We have always received praise from both customers and providers on the approach.\u00a0 Subsequently, some providers have even used the models in their discussions with other customers.<\/p><p>The below infographic provides an overview of our approach and how it was used to improve a customer&#8217;s call center operations.<!-- Hotjar Tracking Code for www.three-s-consulting.com --><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-ed8a17c elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"ed8a17c\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-db40ea5\" data-id=\"db40ea5\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-43b6b0e elementor-widget elementor-widget-image\" data-id=\"43b6b0e\" data-element_type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t<style>\/*! elementor - v3.21.0 - 18-04-2024 *\/\n.elementor-widget-image{text-align:center}.elementor-widget-image a{display:inline-block}.elementor-widget-image a img[src$=\".svg\"]{width:48px}.elementor-widget-image img{vertical-align:middle;display:inline-block}<\/style>\t\t\t\t\t\t\t\t\t\t<picture><source srcset=\"https:\/\/threesconsulting.com\/wp-content\/uploads\/2016\/05\/Should_Cost_Modeling_Infographicsv201-1.webp 379w,https:\/\/threesconsulting.com\/wp-content\/uploads\/2016\/05\/Should_Cost_Modeling_Infographicsv201-1-600x2851.jpg.webp 600w,https:\/\/threesconsulting.com\/wp-content\/uploads\/2016\/05\/Should_Cost_Modeling_Infographicsv201-1-63x300.jpg.webp 63w,https:\/\/threesconsulting.com\/wp-content\/uploads\/2016\/05\/Should_Cost_Modeling_Infographicsv201-1-768x3650.jpg.webp 768w,https:\/\/threesconsulting.com\/wp-content\/uploads\/2016\/05\/Should_Cost_Modeling_Infographicsv201-1-940x4467.jpg.webp 940w,https:\/\/threesconsulting.com\/wp-content\/uploads\/2016\/05\/Should_Cost_Modeling_Infographicsv201-1-84x400.jpg.webp 84w\" sizes=\"(max-width: 379px) 100vw, 379px\" type=\"image\/webp\"><img src=\"https:\/\/threesconsulting.com\/wp-content\/uploads\/2016\/05\/Should_Cost_Modeling_Infographicsv201-1.jpg\" height=\"1800\" width=\"379\" srcset=\"https:\/\/threesconsulting.com\/wp-content\/uploads\/2016\/05\/Should_Cost_Modeling_Infographicsv201-1.jpg 379w, https:\/\/threesconsulting.com\/wp-content\/uploads\/2016\/05\/Should_Cost_Modeling_Infographicsv201-1-600x2851.jpg 600w, https:\/\/threesconsulting.com\/wp-content\/uploads\/2016\/05\/Should_Cost_Modeling_Infographicsv201-1-63x300.jpg 63w, https:\/\/threesconsulting.com\/wp-content\/uploads\/2016\/05\/Should_Cost_Modeling_Infographicsv201-1-768x3650.jpg 768w, https:\/\/threesconsulting.com\/wp-content\/uploads\/2016\/05\/Should_Cost_Modeling_Infographicsv201-1-940x4467.jpg 940w, https:\/\/threesconsulting.com\/wp-content\/uploads\/2016\/05\/Should_Cost_Modeling_Infographicsv201-1-84x400.jpg 84w\" sizes=\"(max-width: 379px) 100vw, 379px\" class=\"attachment-full size-full wp-image-2993 sp-no-webp\" alt=\"\" decoding=\"async\"  > <\/picture>\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Should Cost Modeling for Marketing and Services Spend Should Cost analysis determines what a product should cost based on materials, labor, overhead, and profit margin.\u00a0 The tool was initially developed by the Department of Defense (DoD) to assist procurement officers with determining fair and reasonable pricing.\u00a0 It was later embraced by the commercial industry and &#8230; <a title=\"Should Cost Modeling for Marketing and Services Spend\" class=\"read-more\" href=\"https:\/\/threesconsulting.com\/should-cost-modeling-for-services-spend\/\" aria-label=\"Read more about Should Cost Modeling for Marketing and Services Spend\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[50522902],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Should Cost Modeling for Services<\/title>\n<meta name=\"description\" content=\"Improve marketing and services effectiveness through reverse engineering supplier pricing assumptions.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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