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CLIENT CASE STUDY


New York MTA: Rapid cost reduction

Accenture worked closely with the New York Metropolitan Transportation Authority (MTA) to identify more than $150 million in potential savings.

Overview

Accenture’s analytics solutions have become part of the city’s culture, improving the delivery of services to citizens and transforming how the government manages performance.

The New York MTA is the largest public transportation provider in the Western Hemisphere, with a daily ridership of more than 8.5 million people.

Opportunity
The MTA faced a nearly $800 million budget shortfall in 2010 due to state budget cuts and deteriorating tax revenues. The authority not only wanted to drive down costs in the short term but also deal with these costs in a sustainable way.

Solution

The MTA engaged Accenture to identify opportunities to both reduce costs for its 2010 budget immediately and also enable sustainable savings and other organizational efficiencies over the long term. The rapid cost-reduction project centered on a five-pronged approach adapting proven private sector practices to meet the unique challenges of a public service environment.

Through this holistic approach, Accenture helped the MTA reduce costs and prevent leakage of savings. Specifically, the MTA and Accenture collaborated to make process improvements, eliminate waste, reduce the management layer and eliminate or defer projects that were not crucial.

Some key enablers of this rapid transformation included:

  • Meaningful metrics

  • Communication, culture and change

  • A centralized program management office

  • Leadership alignment, conviction and accountability

Results

After years of working with a number of leading companies and public service agencies on total cost reduction, Accenture completely understands how to make cost reduction more strategic and sustainable. Accenture applied these lessons to enable improvements for the MTA that helped bring quick cost savings and position the agency to achieve long-term results. Specific results include:

  • Re-evaluating 280 projects in the operating budget and removing 141 projects for a savings of $40 million in 2010.

  • Working with 43 vendors and suppliers to renegotiate contracts and identify savings of nearly $40 million, including $18 million in existing contracts in 2010—all without affecting service.

The authority now plans to target additional areas of improvement moving forward, including controlling overtime, consolidating redundant functions and modernizing inventory processes.

“By creating a leaner, more efficient organization, we can restore MTA’s credibility and position ourselves to make great improvements to our system when the economy recovers.”—Jay H. Walder, chairman and chief executive officer, New York MTA (as quoted in April 15, 2010, issue of the New York Post)

 

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