Mastering Cost Optimisation Key takeaways to unlock efficiency and elevate performance
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The imperative of Cost Optimisation Cost Optimisation is more than cost cutting – it’s a strategic approach that balances cost reduction with the value these costs bring to the business. It’s about making deliberate decisions that enhance both efficiency and effectiveness.
1 in 2 CEO’s are prioritising measures to optimise operating costs as a key strategy for Growth.
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Key drivers of cost Economic volatility: Agile financial strategies are crucial for navigating economic uncertainty with 95% of CEO’s saying this is a top concern Regulatory changes: Regulatory costs for business have increased by over 45% in the last decade Technological advancements: Investment in AI, IoT and automation is key to reducing long term costs. Up to 40% working hours could be in scope for augmentation and automation Customer expectations: 72% consumers now expect personalisation as standard in services.
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Key strategies for effective cost management Mature operating models and digital: Organisations with advanced operating models see up to 38% higher customer engagement and up to 30% cost reduction through digital Data and infrastructure: Firms that optimise their data management and shift to cloud can achieve up to 50% reduction in IT costs Execution and spend management: Effective programme management and spend optimisation can lead to 35% decrease in overruns and 20% reduction in 3rd party spend Cost conscious culture: Organisations that foster a cost- conscious culture typically see a 15% increase in cost saving year on year.
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Most common mistakes Neglecting alignment: Failure to align organisational goals with cost optimisation efforts can lead to 60% higher likelihood of failure Underestimating complexity: 70% of digital transformations fail mostly due to lack of comprehensive strategy and underestimation of the cultural change Inadequate data management and integration: Inefficient data management and rigid technology infrastructures can see increased operational costs by up to 30% and 20% higher IT costs Employee involvement: 75% initiatives that failed to achieve their objectives were because they did not actively involve their employees in the planning and implementation.
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Transform challenges into opportunities In today’s rapidly evolving marketplace, strategic cost optimisation isn’t just about saving money – it’s about investing wisely, enhancing efficiency, and securing competitive advantage. The journey involves more than cutting costs, it requires a holistic approach to encompassing organisational alignment, technology integration, data-driven decision- making, and a culture of continuous improvement.
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