New Research Proves Cost Management is Still a Global Imperative

In today’s increasingly digital world, businesses recognize the need to transform their operations and capabilities by adopting more integrated and dynamic technologies. Deloitte recently released their 2019 Global Cost Survey, and the findings show that cost reduction and cost management remains a top priority for businesses worldwide. “By harnessing the power of digital technology to streamline their cost structures and generate cost savings, companies can take full advantage of the latest digital innovations — becoming the disrupters, rather than the disrupted.” – Omar Aguilar, principal and global strategic cost transformation leader, Deloitte Consulting LLP. We all know there are only two ways to grow profits – generate more revenue or reduce costs. Investing in technology to drive down costs is important – but investing in technology to understand the true drivers of cost in your organization is equally important.

Read the full report at Deloitte >

Cost Management is Evolving With the Help of New Technologies

“Making effective cost management decisions—those that drive strategic value beyond just producing short-term savings—requires understanding how cost decisions flow through to the top and bottom lines.”

CFOs depend on insights from their analytics for important business decisions, but when faced with the rapidly changing business environments, they must change their approach to cost management. By implementing the right tools and technologies, businesses will better understand their value levers and fundamentally change their company’s cost structs, seize opportunities, and grow profitability. However, technology alone is not enough to accomplish this. Effective digital cost management also requires a far more innovative and strategic approach than traditional approaches to cost management.

Read More at The Wall Street Journal >

How Federal CFOs Can Drive Cost Transparency

CFO’s across government agencies are encountering challenges when establishing effective cost management and accounting practices because of complex issues rooted in data, systems, processes, and/or organizational structure. The need for more cost transparency stem from an increasing need to link strategic objectives to the budget, cost of programs and services, and performance measures. CFOs looking to implement cost transparency initiatives can leverage a tool that deploys a managed services model to efficiently achieve cost management, accounting and performance objectives.

Read More at The Wallstreet Journal >

Reducing Costs with Centralized Category Management

Category management managers are employing a broader set of performance metrics that go beyond vendor savings, including operating efficiency metrics such as: procurement operating cost as a percentage of total savings; spend managed per procurement employee; and, purchase orders processed per procurement employee. This added focus on operating performance helps to balance the savings achieved using new sourcing approaches with the cost required to achieve them.

Read More at The Wall Street Journal >

New Priorities For Modern Cost Management

According to Deloitte’s global cost management survey, cost reduction is now a global imperative, with 86% of global respondents saying their companies are likely to undertake cost reduction initiatives over the next 24 months. Cost management ha become a strategic enabler with the power to disrupt entire industries and fundamentally change how companies do business and remain competitive. To help avoid falling behind, companies in every part of the world should understand the potential impact of digital so they can position themselves to capitalize on the opportunities, particularly regarding automation, analytics and cognitive technology. Now we are seeing the rise of advanced, next-generation cost management solutions that harness the power of digital technologies to dramatically improve efficiency and effectiveness, and to enable fundamentally new business models and new ways of working.

Read More at The Wall Street Journal >

Breaking Down the Barriers of Personalized Cost Visibility in Manufacturing

Customers are ever-evolving and gravitating towards more personalized products that meet their unique specifications. For manufacturers, meeting this demand for high-quality individualized goods is nearly impossible to do in a cost-efficient manner with outdated operational processes based on yesterday’s technology. Therefore, organizations are looking to transform their facilities into open integrated factories – the kind that enable the visibility and flexibility needed to make their customers’ personalization dreams come true. By adopting integrated and dynamic technologies, manufacturers can break down these barriers, connect their processes, and achieve a unified view of the essential information required to improve production performance.

Read More at The Digitalist by SAP >

Is Cost-Plus Pricing Right for Your Business?

The idea behind cost-plus pricing is simple: the seller calculates all costs (fixed and variable) incurred in manufacturing the product, then applies a markup percentage to these costs to estimate the asking price. This method can lead to powerful differentiation, greater customer trust, reduced risk of price wars, and steady, predictable profits for the company. It is essentially the opposite of value-based pricing, where prices are customized based on their target customer. Every businesses’ goal is to reduce costs, increase profits and retain customers, and the way a business prices its products can have a major effect on that.

Read More at The Harvard Business Review >

The Cost of Inaccurate Financial Data

Executives are tasked with making the best decisions for the business every day, and they rely on financial data to inform many of those decisions. The key to making the best decisions for the business is trusting the data, because inaccuracies in financial data can have a very negative impact. This impact includes significant reputational damage, potential inability to secure additional investment, and increasing debt levels. Additionally, many organizations spending endless hours fixing financial errors in their accounts. An integrated automation platform helps maintain the integrity of numbers and processes in several ways.

Read More at The Digitalist by SAP >

Costing for Complexity is…. Complex.

“In today’s fast-moving consumer goods environment, consumers demand an increasing degree of differentiation. Serving this need comes at a cost.”

Accommodating the multiple SKUs that come from differentiation adds significantly to production costs for companies that produce fast-moving consumer goods. Cost accountants have an opportunity to provide significant value by assisting their companies in fulfilling customers’ desire for this customization while minimizing the costs. However, allocating the costs of carrying this many SKUs can be a challenge.

Read More at The Journal of Accountancy >