Cost Resilience amid and after COVID-19 has been saved
Cost Resilience amid and after COVID-19
Thriving in uncertain times
These are unprecedented times; confronting many leaders with challenges and questions they never faced before. How can strategic cost management play a crucial role in defining the right actions to thrive and win in these uncertain times?
Only a few would have predicted that the cause of the next economic downturn would be a virus. Setting aside the human toll it is taking globally, the Covid-19 pandemic has caused significant disruptions to the way businesses operate. The many unknowns surrounding the virus – such as the duration of its spread, the possibility of additional waves and the extreme volatility of demand and supply – make it very difficult for firms to adjust and plan for the future. Rapid response to the new conditions is required.
For many companies, cost management has been a strong, annually recurring imperative. However, as companies continued to have positive expectations for revenue growth, many didn’t focus on cost performance structurally. Consequently, cost, operating and business models have drifted away from each other. During such crises, the unprepared are quickly confronted with a plummeting top-line and are struggling to adjust their cost model. Immediate action is often tactical: cash flows and working capital are being optimized, whilst more radical cost measures start to be considered.
Within Deloitte, we strongly believe a more structured approach, going beyond cost-cutting, is required to safe-guard your competitive position and future growth potential. To help you navigate through these times, we gathered our experience into this point of view, including the key elements to consider when strategically reflecting on the cost measures to take during and after the COVID-19 crisis.