Drive business performance with strategic cost optimisation

Identify where to reduce, protect and invest to drive growth and efficiency

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    Discover 3 keys to manage your organisation’s costs

    Despite overwhelming evidence that effective cost management supports enterprise performance, more than 50% of organisations have yet to establish clear measures of success for their strategic cost initiatives. 

    Download our guide to learn how you can accelerate business performance by focussing on the three key pillars of strategic cost management:

    • Define clear measures of success

    • Adopt a consistent framework 

    • Leverage cross functional collaboration

    Strategic cost optimisation delivers on costs and growth simultaneously

    Gartner research shows that leading companies take a proactive and strategic approach to cost optimisation — strategically cutting cost while funding new growth at the bottom of the business cycle. This approach equips leaders to sustain through uncertainty and disruption of crises like the COVID-19 pandemic.

    A cost management framework to prioritise investments

    The Gartner Cost Optimisation Decision Framework helps you prioritise cost optimisation opportunities by value, not just the potential to reduce spending.

    Use this framework to:

    • Create a prioritised list of your most promising cost optimisation opportunities
    • Assess the level of impact of your cost plans across key decision factors/criteria
    • Evaluate the trade-offs between the benefits, costs, risks, and viability of different cost control initiatives
    • Map cost reductions on a simple grid to show the trade-offs and help build buy-in for your cost reduction strategy.

    Download the cost optimisation framework for your function

    Additional cost optimisation questions Gartner can help answer

    Cost optimisation is a business-focussed, continuous discipline to drive spending and cost reduction, while maximising business value.

    Cost optimisation helps functional leaders maximise cost savings. It includes:

    • Obtaining the best pricing and terms for all business purchases

    • Standardising, simplifying and rationalising processes and services

    • Automating and digitalising IT and business operations

    Cost reduction is the process of decreasing a company’s expenses to maximise profits and generate short-term savings. Cost optimisation on the other hand is a continuous, business-focussed discipline aimed at driving spending and reducing costs, while maximising business value.

    Sustainable cost optimisation is based on 5 key pillars:

    1. Financial transparency: Increased financial transparency helps leaders understand how to drive business value through cost optimisation. 

    2. Targets and benchmarks: After establishing transparency, executive leaders must examine how organisational spending compares with peers through external benchmarks. 

    3. Accountability of business units and individuals:  Executive leaders must foster a culture of commitment to cost optimisation by clearly communicating which areas to focus on when proposing cost optimisation ideas to leadership.

    4. Managing demand and supply of costs: Categorising costs linked to both supply and demand can help executive leaders prioritise their cost optimisation efforts. 

    Leveraging savings to drive enterprise strategy: Executive leaders should be proactive not only in optimising costs but also linking the reinvestment of savings to business outcomes.

    Gartner is a trusted advisor and an objective resource for more than 14,000 enterprises in 100+ countries.

    Learn more about how we can help you achieve your mission-critical priorities.