A recent survey we completed with our partners RSM indicated that:
- 70% of Finance Directors are planning to reduce costs
- 50% of Finance Directors said that they had experienced similar cost reduction programmes (RPs)
- 45% are planning to use external advisors to help train and support staff in cost reduction
- The biggest motivators were protecting margins and pressure from the board
- Over 80% of RPs were aiming for an efficiency increase of more than 5%
- Over 30% of RPs were aiming for an efficiency increase of more than 20%
However, what many Finance Directors don’t know is that on average companies are only achieving 59% of their expected savings and just 8% reach or exceed their targets.
Vantage work hard to increase these percentages and make sure that our clients meet or exceed their targets. We know that there are a number of barriers to meeting savings targets, and in our experience, some of the reasons that companies fall short are:
- Recruitment freezes
- Non-discretionary spend budget reduced
- Financial contingencies used
- New build programmes re-profiled
- Component life cycles reviewed
- Risk of “slash and burn” / blind staff cuts
- Short term thinking
- Unachievable in the timescales set out
- Unachievable full stop.
To help you understand what the barriers are to your savings success, we can provide you with an assurance review to check that your cost reduction plans are built on solid and sustainable foundations. Get in touch to make a start.