What Matters Most in a Cost Transformation

February 22, 2024

Organizations are constantly reinventing themselves to keep up with shifting market conditions, competition, and customer preferences. Or they may launch change programs to adopt new technologies and ways of working.

The changes often involve removing cost from processes that aren’t as efficient or cutting edge as they once were in unlocking resources for new initiatives.

According to new BCG research, corporate leaders are making better cost management a priority as a hedge against ongoing economic, financial, and political uncertainties.

Wholesale cuts are one way to manage costs. But drastic measures such as sudden workforce reductions may lead to unintended consequences because they fail to address the root causes of inefficiencies. Nor do they position an organization for future success.

By contrast, a holistic approach to cost management considers the entire enterprise, including operations, labor, and technology. This approach includes quick wins to release funds to invest in long-term initiatives that further growth. It also connects change to an organization’s purpose and vision for the future.

So, what are the key elements of successful cost transformations? Five BCG experts weigh in.