Magic Orange consultant on the importance of value chain discussions

27 July 2018 Authored by Consultancy.co.za

As the small and medium enterprise sector in South Africa becomes more prolific, proper budgeting and cost-management is becoming more essential by the day. According to Theshni Naidoo, a consultant at Magic Orange, a detailed and nuanced approach is the only way to manage costs at any organisation.

Founded in 2012 in Gauteng, Magic Orange is a cloud-based consulting firm that specialises in cost transparency, supporting companies with the analysis and control of their costs. Within cost transparency, the firm supports with shared services expenditure, tracing the line between shared services consumption and solutions.

In addition, the firm provided forecasts and comparisons of costs with the objective of “transforming expenses to investments,” alongside a strong reliance on IT to optimise the budgeting process. Theshni Naidoo, a former Senior Audit Associate at Big Four firm KPMG, has been a consultant at Magic Orange since August last year.Magic Orange consultant on the importance of value chain discussionsAccording to Naidoo, the current economic climate – characterised by digitalisation and other technological applications – is necessitating the stretching of budgets to the extreme amongst all businesses, large and small. In such a scenario, it is important to go beyond the stated costs on paper to analyse exactly what the real costs are in executing a strategy.

Only once the details and nuances of each stage of the value chain are worked out is it possible to identify possible areas of cost-reduction. Naidoo describes such analysis as a “value conversation."

“These discussions facilitate collaborative and innovative responses from stakeholders on how they manage their current costs and accurately budget for future periods. To make these discussions possible, you need a tool that provides you with a granular view of your costs, allowing you steer the conversation towards solutions and initiatives that add value and ultimately grow the organisation,” she says.

Magic Orange itself offers a tool that can determine such costs, particularly for IT expenditure in the shared services domain. Despite initial reluctance, technologies such as blockchain and IoT are rapidly gaining popularity in South Africa, and have now even permeated the small and medium enterprise sector, where costs were previously the primary barrier to technology adoption.

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