Cost Structure Rationalisation

Traditional methods of cost cutting, such as reducing headcount and support functions, are failing to improve profit margins and deliver long-term savings. To stop costs creeping back in and allow for the redirection of excess spending to growth-related activities means dealing with costs’ root causes.

Therefore, companies that need to reduce costs should treat the challenge as an opportunity to identify and reinforce their key capabilities, while divesting those activities that do not truly reflect the business’s strengths or long-term goals. This more strategic approach will make your company more resilient as tough times continue and more robust as recovery begins.

Starting with the largest components in your cost base, your organisation can examine what is creating costs, both through organisational budget structure and products. At PwC, we use a holistic and systemic approach that draws on cross-functional experiences and our industry expertise focusing on the following principles:

  • Right approach: Make more significant and sustainable savings by focusing on ‘doing with less’ and ‘doing things differently’
  • Right ideas: Look at the largest components of business costs – with the greatest potential for savings – typically property, third party spend, IT, staff costs and tax charges
  • Right behaviours: Set up an office of cost control – embed new capabilities

Our team can help your organisation meet business needs by tackling key cost components through:

  • Strategic sourcing: Consolidate sourcing and vendor activity, create shared services, outsource non-core processes and platforms, replace core systems
  • Spend reduction and demand management: Challenge demand, reduce discretionary spend and renegotiate vendor contracts
  • IT consolidation and optimisation: Consolidate IT platforms, hardware, infrastructure and data centres
  • Property optimisation: Review property demand, look at ways to dispose of assets and reduce property-related spend
  • Process improvement and Business simplification: Reduce complexity, errors, duplication, simplify activities
  • Activity and headcount reduction: Review team activities, workload capacity, reporting lines rationalisation

Contact us

Dimitris Fragou

Director

Tel: +30 210 6874756

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