The Ledger

Climbing the Ladder to Successful Cost Management

“While, on average, 81% of a company’s costs are defined by the industry they are in, the remaining 19% are largely determined by executive decision-making.” – Jason Boldt, Gartner

According to Gartner, almost 90% of businesses suffer from poor cost visibility, and the same amount struggle with understanding their costs. These challenges are mainly symptoms of relying on outdated cost models – a major cost anchor that holds the majority of businesses back from gaining actionable insights. To overcome poor cost visibility, leading cost management executives encourage positive cost behaviors, or “cost ladders” that alleviate the strain that bad practices put on the business. These ladders include increasing cost agility, figuring out what cost models best fit the business goals, and detecting early cost warnings. However, Gartner found that only one in three companies practice any of these behaviors in their costing activities.

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Three Pillars for Actionable Supply Chain Planning

While supply chain managers understand that uncertainty and volatility come with their territory, they also hold the responsibility to properly understand what will happen next and how to react to it.  Still, many lack the insight necessary to navigate through unforeseen changes that could affect the business in any way, at any time. For a business to transform their supply chain, they must first build a solid and strategic foundation that can bring their supply chain analytics as close as possible to real time operational processes. More than ever, users need insight on demand, supply, and environmental events in real time. Embedded analytics can provide that insight and even streamline processes by automating decision-making. To help meet the challenge of supply chain volatility, leading organizations are focusing in on three key pillars for a better supply chain strategy.

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Simulation Capabilities Are Giving Manufacturers A Major Advantage

Simulation capabilities are being used by manufacturers everywhere to help decision makers understand what has happened or will happen in the future of their business. In the case of additive manufacturing, simulating the material properties and the processes embedded in devices, helps OEMs guarantee that they have the right combination of material and settings to manufacture the necessary part. This ensures the part strength, support structure, and other key requirements will be met so that the part will be successfully produced. Finance departments use simulations for scenario analysis and planning. They want to answer the questions, “what will happen if…?” and be prepared for potential outcomes. With manufacturers focusing more on financial planning & analytics functions to drive their strategies, they need the ability to confidently and accurately predict the impact of internal and external changes on both costs and profits.

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Life Hacks For the “Next-Gen” CFO

To be a real strategic partner to the business, modern CFOs must embrace new technologies and tools available to them that can give them a major analytical boost. Business intelligence has become a necessary tool that helps businesses organize, analyze, and contextualize the information they collect. BI takes financial and operational data to produce integrated dashboards, key performance indicators and, most critically, business insights. As such, it has become today’s CFOs key asset, enabling the finance function to provide the business with automated data analytics for historical, current, and predictive views of operations.

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