Special Report: Strategies for Growth

Sustaining a healthy bottom line – with economic recovery some way off and as businesses prepare to dig in for the long term, the spotlight remains on one key question: How can companies sustain a healthy bottom line throughout 2012 and beyond?

This question was the main focus of a recent roundtable debate, hosted by Expense Reduction Analysts, a leader in cost, purchase and supplier management and chaired by Anthony Hilton, financial editor of the London Evening Standard.

The event, which took place at St Ermins Hotel Westminster, welcomed guests from various business sectors including National Car Parks, Endless LLP, Decathlon UK, My Home Move, Sartorius and Instant.

As consultants in this area what was most interesting – and heartening – to hear were comments that strongly suggest that cost management is playing a bigger role in the overall strategic planning of organisations. Not surprisingly a number of companies had made their redundancies and business expenditure savings over the last 36 months. However emerging from one of the toughest three years in living memory was an appetite for strategic cost management rather than just tackling costs as a transactional exercise to achieve better pricing, which arguably is a short fix solution as the better pricing you achieve will quickly not be best value. The evidence for this was expressed in terms of how companies are looking to enhance their bottom lines by working more closely with their suppliers; digging deeper into management information; and not just benchmarking suppliers but also the cost management performance of different parts of their own business.

This growing strategic role for cost management was also reflected in discussions surrounding the importance of driving cultural change within an organisation to grow the bottom line; invest-to-save initiatives, through for example deploying energy efficiency initiatives; and opening up decision making on costs so that it is not just top down and goes beyond the financial director into the heart of the organisation.

From our own experience, the development of an effective cost management strategy will require organisations to set procurement objectives, a clear vision for the buying process and measurable outputs. A more strategic approach will also require a review of buying policy, processes and culture within the organisation.

You can download a copy of the report by clicking here.