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