C-Suite Leaders Taking Entirely New Approach to Costs, According to Accenture
July 13 2022 - 7:59AM
Business Wire
Traditional cost cutting measures are no longer
enough; Cost transformation must be interconnected with growth,
sustainability and innovation
More than three-quarters of companies (76%) cut costs to survive
during the pandemic; now 90% of C-suite executives say they must
take a whole new approach to costs in order to transform their
businesses to respond to ongoing disruption while also uncovering
new growth and value, according to a new report from Accenture
(NYSE:ACN).
The Zero-Based Transformation: The Big Reset report, based on a
global survey of 2,000 C-level executives across 15 industries,
reveals an urgency to shift away from traditional cost reduction
efforts that weren’t successful in the past. Executives acknowledge
their current and future cost transformations must be
interconnected with strategic priorities such as growth,
sustainability and innovation and centered around building new
technology-enabled capabilities.
According to the report, a vast majority of executives surveyed
(92%) say that these transformations are no longer driven solely by
financial considerations, but also need to account for their impact
on their company’s sustainability and purpose. Their priority is
not only profitable but responsible growth. In addition, leaders
today are looking to reset their business holistically, instead of
focusing on one or two areas as in the past. Virtually all
executives (96%) indicated that their cost transformation plans
span all or most areas of their business.
“As companies come out of survival mode and rush to transform
all aspects of the organization, leaders have quickly realized that
they can no longer look at costs as just an annual budgeting
exercise,” added Robert Willems, global Zero-Based Transformation
lead, Accenture Strategy. “Starting with a zero-based approach that
is rooted in technology allows leaders to reimagine their business,
reset their cost base, and free up funds for strategic priorities
that drive growth, build resilience and better meet stakeholder
needs.”
The report also addresses the critical role of technology in
successful cost transformations because it gives companies
visibility and a forensic view of costs to manage and recalibrate
in real-time, as well as plan for future scenarios. Nearly 70% of
executives said they are investing in technologies including AI,
digital tools and cybersecurity to optimize operations. Without
these investments, 80% of executives see continued challenges to
their cost transformation efforts.
According to Accenture, there are four key aspects companies
must focus on to make cost transformations succeed where past
efforts have failed:
- Gain forensic, real-time visibility with advanced
analytics. Putting data and analytics at the core is critical
to gaining the insights needed to make intelligent, fast and
accurate decisions. It’s essential to invest in the right tools and
technologies to leverage the power of data to continuously monitor,
course correct and control as conditions change.
- Start at zero and redesign the business for growth and
resilience. Taking a zero-based approach allows companies to
consider the tradeoffs necessary, look at costs holistically across
the organization and align resources with new business priorities
and capabilities.
- Bring everyone along for the journey. One of the keys to
a successful cost transformation is aligning the story from the top
to minimize conflicting priorities and ensuring consistent
messaging both internally and externally. In fact, nearly seven in
10 executives agree cost transformation creates opportunities for
employees to grow in their careers with new capabilities and
ownership.
- Make the transformation count. Cost transformation is no
longer a one and done intervention. To make it a continuous
activity, companies need the right governance, data and insight
capabilities to manage cost transformations in a way that ensures
the benefits endure.
“We are in a perfect storm with record inflation, global
volatility, supply chain challenges, and labor and material
shortages. To successfully navigate this storm, company leaders
have realized they need to focus on resilience, create value and
deliver on sustainability simultaneously. Those who fundamentally
rethink their total cost base and how they operate will move beyond
cutting costs to not only survive but thrive, compete and win in
the future,” said Bill Theofilou, CEO & Enterprise Strategy
global lead, Accenture Strategy.
About the Research Accenture Research conducted a survey
of 2,000 executives across 15 industries and 12 countries to
understand the decisive actions executives are taking to fuel
growth and resilience of their organizations. More than a quarter
of the survey respondents were Chief Executive Officers (29%) and
the remaining sample was equally distributed across Chief Strategy
Officers, Chief Financial Officer, Chief Operations Officer and
Business Unit Directors. A large majority of executives (95%) were
part of corporations of at least $1 Billion in revenue.
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clients in more than 120 countries. We embrace the power of change
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shareholders, partners and communities. Visit us at
accenture.com.
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Maggie Nolan Accenture +1 917 852 3694
margaret.d.nolan@accenture.com
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