Strategic Cost Reduction
Scalable cost platforms to drive growth
Not all business costs are the same since they drive results in different ways. Therefore there is no "perfect" portfolio of costs or investments. An effectively managed portfolio is one that balances short-term and long-term objectives, so making radical changes in cost performance is typically a challenging proposition.
Deloitte’s Strategic Cost Reduction offering focuses on structural, enterprise-wide changes that can produce sustainable cost savings and margin improvements. In doing so, we strive to help our clients build scalable cost platforms to drive profitable growth. Based on extensive experience with cost improvement programs across industries, we offer three broad cost reduction strategies that help our clients focus on cost categories tailored to the specific cost challenges at hand.
Strategic Cost Reduction services
Get the house in order. Focus on immediate actions to reduce costs, bring stability, and capture savings to avoid further deterioration of the business.
Sustain the business. Take actions that help improve the company's cost and competitive position, avert cuts that might inhibit future growth, and rebalance costs to fund investments in strategy enablers.
Set the stage for growth. Develop a scalable cost platform for growth and invest in building capabilities to enable the strategy while managing costs in alignment with the stated growth strategy.
How each strategy is shaped is based on answers to important questions, including: What cost strategy can best enable the business strategy? What is the objective of the cost program? Which cost levers should be pulled? How quickly is cost improvement desired? What is the company’s track record with cost reduction initiatives? What is the anticipated change management burden? Are business information and data readily available?
Potential bottom-line benefits
- Structural, not continuous improvement focused
- Enterprise-wide and programmatic, not a point solution
- Tailored, not a “one size fits all” approach
- Financially balanced, so it leverages quick hits to fund longer-term opportunities
- Results-focused, not distracted by obstacles along the way
Quick and decisive action around cost performance can help the business regain its balance.
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Driving Enterprise Value
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