Using Analytics and Reporting to Strategically Manage Cost

Increasing competitiveness in today’s business environment coupled with general uncertainty in the capital markets have made it harder for businesses to grow revenue and market share. Additionally, the Financial Services industry continues to be faced with new and changing regulatory requirements which have prompted financial services companies to expand their workforces to enhance focus on regulatory response, risk management and compliance. With downward pressure on top line growth and the increasing need for non-discretionary spending, some financial services companies have looked toward reducing operating costs as a means to improve margins and shareholder returns.

Businesses seeking to reduce operating costs should take care not to promote arbitrary or enterprise-wide cuts in spending, which can hurt capabilities to support growth initiatives. A smarter approach is “strategic” cost reduction. For example, instead of reducing project spending by ten percent across all projects, decision makers might reallocate budgeted spending by cutting or deferring low-priority projects and prioritizing projects with presumed higher benefits. It’s all about cutting the right costs, while remaining diligent in challenging the assumptions used in projections.

Identifying the right opportunities for “strategic” cost reduction across an entire organization can be challenging. Decision makers need actionable and timely information about key cost drivers for the company, providing insight into the cost savings implications of adjusting key spending behaviors. The most effective decisions may rely not only on powerful analytics, but on the powerful story-telling that effective reporting can deliver.