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Strategic Cost Transformation
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.
Balanced transformation for strategic cost management
Deloitte’s Strategic Cost Management 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, our services generally fall into four broad transformation strategies to help organizations address their specific cost and strategic challenges.
Cost saving programs aim to identify opportunities to fund strategic priorities, but their nature may differ amongst different business scenarios and priorities:
- Turnaround
Save to turnaround. Focus on immediate cost reduction solutions, maximize liquidity, bring stability, and capture savings to avoid further deterioration of the business.
- Fund
Save to fund. Focus on actions that help improve cost and competitive position, avert cuts that might inhibit future growth, and rebalance costs to fund investments in business strategy enablers.
- Grow
Save to grow. Enable or develop a scalable cost or business platform to fuel growth and investment in core capabilities while supporting a differentiated business strategy.
- Transform
Save to transform. Improve business operations through application of disruptive cost approaches such as automation and cognitive solutions to enable agile strategies in the business and set the stage to thrive in a fast changing market environment.
Typical results of Strategic Cost Transformation
- Improved cost transparency
- Scalable cost baseline
- Flexible cost baseline
- Cost performance monitoring
- Cost governance structure in place
- Pro-active and realizable cost saving initiatives identified
Advantages of Strategic Cost Transformation
- 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
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