Drive business performance with strategic cost optimization

Identify which costs to reduce and protect to drive growth and efficiency, even during inflation

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Discover 3 keys to managing your organization’s costs

Your guide to optimizing costs strategically, not tactically.

Strategic cost optimization rarely succeeds without three things:

Standardizedcost managementframework
Shared understanding of cost-to-value relationships
Consistent definition of success beyond cost savings

Download this guide to increase the success of your strategic cost optimization initiatives.

Strategic cost optimization delivers on costs and growth simultaneously

Organizations have been reintroducing costs while pursuing postpandemic growth opportunities, but now must optimize costs to navigate new economic headwinds, including input shortages andinflation.

In these conditions, it’s even more important to optimize costs without compromising growth. Watch this video for a quick primer on strategic cost optimization. (Also see the FAQ, “Is cost optimization my responsibility?”)

A cost management framework to prioritize investments

The Gartner Cost Optimization Decision Framework helpsyou and your fellow executivesprioritize cost optimization opportunities by value, not just the potential to reduce spending.

Use this framework to:

Create a prioritized listof your most promising cost optimization opportunities based ona shared framework
Assess the level of impactof your cost plans across key decision factors/criteria
Evaluate the trade-offsbetween the benefits, costs, risks, and viability of different cost control initiatives
Map cost reductionson a simple grid to show the trade-offs and help build buy-in for your cost reduction strategy

Download the cost optimization framework for your function

Finance

HR

Information Technology

Marketing

Public Sector IT

Sales

Customer Service & Support

Supply Chain

Additional cost optimization questions Gartner can help answer

What is cost optimization?

成本优化的以业务为中心,连续s discipline to drive spending and cost reduction, while maximizing business value.

Why is cost optimization important?

By taking a strategic cost optimization approach, business leaders can make more informed budgeting and spending decisions while investing for growth and digitalization.

成本增加之间的区别是什么tion and cost optimization?

Cost optimization is a continuous, business focused discipline aimed at maximizing business value while reducing costs. Cost cuts are a short-term move to decrease expenses. See these articles on cost-cutting:

Is cost optimization my responsibility?

Strategic cost optimization is a cross-functional collaborative effort across functions and businesses — and their leaders. It is not the job only of the CFO or finance team.

Given the inflationary environment, for example,margin management(e.g., pricing changes) can provide some respite against rising costs, but executive leaders must manage the pressure on profitability together. Three actions are needed to optimize costs without compromising growth:

Align costs disproportionately to enhancing points ofdifferentiation(e.g., digital capabilities that competitors cannot easily replicate).
Embrace positive aspects ofzero basing(i.e., a focus on value) beyond budgeting season to how ongoing spending decisions are made.
Digitalize at scale tounlock productivitygains that can offset inflation.