Cost Management

A cost management strategy is only effective if it is transformational, lasting, and sustainable. With end-to-end budget or headcount reduction, the impact is immediate—but the benefits don’t last. Quick cuts simply do not address underlying problems, nor do they improve the longer-term health of the company. In fact, they may impact an organization’s ability to compete and serve, ultimately exacerbating the original need for bottom-line improvements.

BCG’s holistic approach to cost advantage efficiently and effectively transforms an organization’s business, taking into consideration direct costs such as labor and materials as well as overhead costs—which in turn allows for reinvestment in future growth, stability, and strategy. The result is effective cost optimization that boosts performance and margins while simultaneously unlocking total shareholder value.

Why Is Cost Management Important Now?

Inflation, market uncertainty, and rising interest rates are all putting pressure on organizations. At the same time, organizations need to invest in talent, sustainability, and digital to remain competitive. Higher operating expenses are squeezing margins, prompting companies to look at their cost structure for answers—while continuing to fund innovation and growth. But there are many reasons beyond macroeconomic conditions for streamlining costs. Businesses that secure short-term cost optimizations can shore up long-term competitive advantages, exploring opportunities and enhancements that will be beyond the reach of others.

What’s Different About BCG’s Approach to Cost Management?

Unlike one-dimensional cost reduction or restructuring plans, BCG’s accelerated cost advantage approach resets costs within a strategic framework that is customized, precise, and thorough. Our total cost management process involves quickly diagnosing underlying operating issues, benchmarking performance, and then implementing short-, medium-, and long-term cost optimization initiatives and industry-specific measures to rightsize expenses.

In parallel to optimizing costs, BCG experts help clients build a foundation for future competitive differentiation and growth by:

• Considering end-to-end processes, taking a holistic perspective, and focusing on outcomes
• Embedding digital in everything we do
• Working shoulder to shoulder with company leaders
• Providing margin and cost transparency to enable more informed decisions
• Ensuring executional certainty while driving communication
• Helping cultivate a culture of continuous improvement that leads to sustainable change

BCG has a vast array of proprietary tools and resources to build leaner, faster, stronger organizations. Our seamless, accelerated cost advantage approach starts with a rapid assessment phase to identify and prioritize areas of cost inefficiency where swift interventions are warranted—using benchmarks to compare a company’s performance to its peers. From there, our cost management experts leverage their experience and deep industry knowledge to deploy resources tailored to a client’s specific needs.

The approach incorporates the KEY by BCG portfolio and program management software, which has backed hundreds of successful cost optimization programs, accelerating value creation and managing complexity through every phase of the journey.

Meet Our Cost Management Experts

Our experts recognize the challenges that come with a cost transformation and have an established track record of success across multiple industries. They’re ready to partner with clients around the globe to drive lasting change.