Accenture: CFOs Need to Get Busy with Strategic Cost Management

About a quarter of CFOs are talking the talk, but far fewer are walking the walk when it comes to more strategic spending – and saving – to better address disruptive forces in the marketplace, notes a new study from Accenture (News - Alert).

The “CFO Reality Check: Good Intentions in Cost Management are Not Good Enough” report indicates that only six percent of the CFOs it surveyed are focused on strategic cost management this year. However, 58 percent of them believe their industries will see disruption, 41 percent expect more than half of their competitors to go the way of the dinosaur, and 59 percent think they need to do strategic cost management at some point.

Indeed, Accenture says that companies that want to survive disruptors need to move from cost cutting on an ad hoc basis to more strategic cost management that employs digital technologies. This will serve not only to help businesses survive and thrive in the ever-changing marketplace, but also to address the trend of CFOs evolving from bean counters to strategic planners, Accenture notes.

“For CFOs who are currently pursuing this approach, over half of their companies are mostly investing in mobility and moving activities to the cloud (54 percent and 52 percent respectively),” Accenture writes. “Three years from now, they will also make further investments in robotics and big data analytics (44 percent and 40 percent respectively).”

Companies in the insurance, energy, consumer goods, and automotive and industrial arenas believe their verticals are seeing the most disruption, and thus are most at risk from competitors, at a respective 40 percent, 31 percent, 23 percent, and 23 percent, Accenture says. Despite this recognition, however, Accenture reports that only three percent of the CFOs in the insurance space, 16 percent in energy, 10 percent in consumer goods, and seven percent in automotive and industrial say changing their business strategy is a low priority.