Save-to-Thrive has been saved
Enterprise transformation and performance improvement strategies during the Covid-19 pandemic
The Covid-19 crisis has sharply impacted positive revenue growth expectations and is driving more companies to pursue aggressive cost reduction. Whilst some companies are reducing costs to continue operating, others have recognised the need to transform their operations and capabilities with an increased and accelerated emphasis on technology and digital enablement, so as to position themselves to thrive in the next normal. We call this mindset “Save-to-Thrive.”
Deloitte’s 2020 Global Cost Survey
To better understand the impact of the COVID-19 pandemic on organisations around the world—from both a transformation and performance improvement perspective — Deloitte recently surveyed more than 1000 executives with direct involvement in their companies’ cost management and enterprise transformation efforts, and who represent a broad range of industries and global geographies.
We present Global and European insights from this survey, informed by 378 executive respondents across the European financial services and private sector, to provide a view into the short- and long-term impacts of the crisis and what companies are doing about it.
In response to Covid-19 we are seeing that businesses across Europe and globally, cite falling levels of consumer demand and an internal inability to adjust cost structure to meet demand as their most pressing challenges. Decisions that companies make today to cope with the COVID-19 crisis can help or hinder their positioning for the future.
In this report, we discuss the key survey findings using a three-stage framework (Respond-Recover-Thrive) to analyse companies’ actions and expectations as they cope with the pandemic and position themselves for the post-crisis world.
Read on and download our full report to learn more…
Key findings for Europe
- Expectations for positive revenue growth have declined significantly due to Covid-19. The positive revenue growth outlook is down by 45 and 46 percentage points for the Financial Services and Private sectors respectively
- A significant increase in likelihood to pursue cost reduction programmes relative to pre-Covid-19 levels (88% increase for Financial Services and 95% increase for Private Sector)
- External shifts in cyber security vulnerabilities and the internal inability to adjust the cost base to meet demand are the most pressing challenges facing CxOs in Europe
- Executives are deploying a range of transformative actions across all three stages of recovery
- Top operating model priorities in a post-crisis world relate to technology transformation and remote working, with the most relevant technologies being Cybersecurity, AI and cloud computing solutions
- Revenue sources will be fundamentally different in the new normal, and products, services and customer interactions will change to fit the new conditions. Most notably, the crisis has accelerated the shift from physical to digital channels
Prior to the Covid-19 pandemic the appetite for cost reduction in Financial Services was already high, reflecting the continued revenue pressures of many of the sectors. The pandemic has accelerated this focus on cost and the pace of change necessitated by the crisis has also prompted many companies to reimagine their operating models, providing a unique opportunity to rapidly test new technologies and operations to build capabilities for the future.
Anthony Schofield, UK Financial Services Cost Transformation Leader
Revenue sources will be fundamentally different in the new normal as changes to how people live and work are boosting demand for new products and services. As the pandemic has greatly accelerated the shift from physical to digital channels, it has revealed the limitations and risks of globalization and global supply chains. To prepare to provide services to meet these needs and to thrive, businesses must improve the agility of the cost base and strengthen their resilience to provide room for growth.
James Gregson, UK Private Sector Cost Transformation Partner
We have significant experience shaping Cost Programmes and delivering tangible benefits across a range of clients across Financial Services and Private Sector clients. If you would like to find out more, please reach out to one of our key cost contacts below.