To Manage Costs Effectively, Align Around a Shared Framework

Gartner research shows that organizations that were effective at cost management before the pandemic were more likely to see positive business performance during the crisis. What can we learn from what made these outperformers effective cost managers in the first place? The research shows three key success factors: Consistent use of cost frameworks across functions, clearly defined measures of success and cross-functional collaboration on cost management. It’s also clear that many organizations continue to underperform in these areas, despite the opportunities. Download eBook: Driving Business Performance With Strategic Cost Optimization “Executive leaders who build critical capabilities around cost management can capture a range of benefits,” says Srinath Sampath, Senior Director Analyst, Gartner. “To do that, be intentional about standardizing the cost management frameworks used across different business functions and develop a community of practice with cross-functional representation around cost optimization strategies.” Use a cost management framework A cost management framework is a set of cost categorizations that are formally used in budgeting, target setting and reporting on costs — and the research showed them to be critical to cost management success. Organizations that used the same cost management framework consistently across functions were: More likely to experience stronger cross-functional collaboration