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Not all cost saving programmes are worth it

Cost management used to be something businesses only thought about when they were struggling. In recent years, however, it has become a standard operating practice that receives constant attention—in good times and in bad. Deloitte's first biennial global cost survey report Thriving in uncertainty in the age of digital disruption based on interviews with 1,000 C-level executives and senior management in four major regions: the United States (US), Latin America (LATAM), Europe (EU), and Asia Pacific (APAC), found that generally:

  • Cost reduction is a global imperative
  • Many organizations fail to meet low cost saving targets. Not only this, they can also deflect from growth generating programmes.

Drivers of cost reduction programmes

The study found that the main cost reduction drivers were:

Source & Copyright©2017 - Deloittes

The evolution of cost management

Deloitte’s review of the evolution of cost management:

Source & Copyright©2017 - Deloittes

revealed that next generation of cost management will be focussed on analytics and cognitive automation.

Overall conclusion

Tactical cost management approaches typically yield cost savings of less than 10%. As such, many companies would be better served by applying approaches that are more strategic and thus more likely to deliver greater savings. Deloitte then give their Accelerators view of business:

Source & Copyright©2017 - Deloittes 

CTMfile take: This new report is a welcome addition to corporate treasury department’s thinking and well worth a download.

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