Insight

CFO’s guide to getting started with cost efficiency

Take a disruptive approach to cost efficiency to put your organization on a long-term path of sustained value and growth

CFO’s guide to getting started with cost efficiency

Take a disruptive approach to cost cutting to put your organization on a long-term path of sustained value and growth

In today’s economy, every CFO and financial leader is taking a hard look at ways to take out cost without compromising quality or growth. Whether your organization is seeking to make immediate cost cuts, better position the business for future growth – or both – you need the right mix of intelligent cost cutting measures tailored to your unique business needs.

What top-performing finance teams do

2-3X

Spend 2-3X more time on analytics and decision making

70%

Automate 70 percent of processes and reporting

<0.7%

Spend <0.7 percent of company revenue completing the finance function

Source: KPMG 2022 Elevating Finance survey and KPMG 2021 EPM survey

Reorganizing

An interesting concept, especially if some of the spending categories have receded. There may be an opportunity to shift responsibilities, enabling category managers to take on more of the sourcing responsibilities and supplier management. Or you could move some of those activities into the stakeholder organizations, which can increase efficiency and free up time to address some of the more high-value tasks.

Supplier self-service

Self-service is one of the key benefits of e-procurement done right. Companies should maintain solid supplier portal functionality so suppliers can check invoice status and engage in digital bidding. Pushing supplier enablement, taking advantage of the time to bring new suppliers on board, and making sure invoices are coming in digitally can save a tremendous amount of time.

Standardizing contract templatess

Simplifying the way firms contract with new suppliers could significantly streamline the approval process, where back and forth over legal redlines is often a major speedbump. Putting a collection of basic templates in place and then, for example, rationalizing a clause library to house standard preapproved contract language, can facilitate the transition to an efficient level of guided self-service contracting.

Process mining

This tactic continues to be an important part of procurement portfolios, providing a clear snapshot of enterprise-wide purchasing processes in near real time, enabling you to identify and address pricing, compliance, and supplier inefficiencies. Process mining can be instrumental in discovering where manual efforts are producing inefficiencies, as well as help identify automation opportunities. If you plan to embark upon this exercise, it’s critical to ensure the relevant data is accessible, properly structured and, above all, accurate.

Take the first step

If you’re ready to disrupt your approach to cost cutting – and deliver more value to your business – download this Cost Efficiency Getting Started Guide from KPMG. Discover the qualities and expectations of successful programs and explore how KPMG is helping CFOs and finance leaders build organizational resilience and flexibility.