Throughout the business world, chief financial officers of enterprise organizations are worried about their company surviving in the face of disruptive competition. But while many of those executives view cost management solutions as a key strategy for building long-term financial stability, only a fraction of those CFOs are actually taking steps to bring expenses under control.
According to Accenture’s “CFO Reality Check” study, 24 percent of CFOs are worried that disruption in their industry could eventually eliminate their company. Many of those companies are focused on growth as a strategy to combat competitive disruption. But only six percent of those executives are investing in strategic cost management.
Those numbers illustrate a gap in CFO logic: Even though cost management is seen as a critical growth driver — reducing expenses can help a business grow its profits and increase financial stability — many CFOs spend their time focused on other methods of growing the business.
But that may be slowly changing. As CFOs take on a larger role in organizational decision-making, some innovative executives are pushing their companies to use cost management as a growth driver.
“More CFOs are advocating for digitally-driven strategic cost management to improve agility and fund growth initiatives,” says Christian Campagna, senior managing director for Accenture Strategy, in a press release. “More than half of CFOs already have performance objectives in place that make them responsible for strategic cost management on a daily basis. The challenge will be to consistently perform against those set objectives.”
Managing costs, minimizing risk
Accenture’s study emphasizes the role cost management strategies can place in supporting an organization’s growth, and calls on CFOs to invest heavily into such measures. The report points out that comprehensive cost management can extend the runway for an enterprise’s financial viability, essentially buying more time for other growth measures to generate results.
Meanwhile, cost management strategies — which should include enterprise mobility management and telecommunications expense management — eliminate unnecessary costs that eat away at a company’s profits without offering any value in return. Digital technologies are a particularly promising area in this regard, since data and technology usage can often be optimized to improve efficiency without inhibiting productivity.
Accenture also notes that, by emphasizing cost management as a growth driver for companies, CFOs can expand their own role within the organization and spearhead new efficiencies that drive growth and provide better financial stability. That value-added proposition gives CFOs a personal incentive to transform their organizations through improved cost management.