Deloitte, professional services and financial strategists, have revealed next-generation cost-saving strategies in the wake of the digital age of disruption.
The company states in its Global Cost Survey Report (GCSR) that nearly two-thirds of companies have failed to reach their most modest targets when they used traditional and tactical strategies. As such, Deloitte is looking toward strategies to combat the digital disruption and evolve through it.
Deloitte states that companies who “fail to keep stride with the pace of innovation and remain complacent with traditional cost management practices will undoubtedly lag behind and fall to more forward-looking competitors”. They also state that, of the “nearly 1000 executive leaders” surveyed, cost reduction is a focus of most companies at a global level. They also state that many global business leaders fail to recognise the sizeable advantages provided by resorting to digital solutions. This causes potential value to become lost because relying on outdated and inefficient cost management models are just that: inefficient.
Deloitte monitor associate director, Daryl Elliot, commented that organisations are pursuing cost reduction targets of “less than 10%” with “nearly two-thirds (63%) of organisations failing to meet their goals”. This owes to “not driving cost reduction through strategic means, but rather tactical cost management approaches”. Approaches that Eliot speaks of include streamlining business processes; reducing external spend; and removing inadequate means in business dynamics. He states that “businesses can choose to engage” in new technologies and capitalise on cost management initiatives, or remain “hindered by outdated and ineffective” models of margin improvement.
Operating at the forefront of next-generation digital solutions requires the right know-how for proper implementation
Eliot states that leaders should “arm [their companies] with specialists in digital analytics, data science and automation”. He adds that companies must prepare management to adopt the latest strategic practices in determining effective cost reduction. Companies that embrace new digital solutions and understanding the value of investing in next-generation cost and margin improvement solutions, will evolve through digital disruption and capture opportunities in the future.
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