The challenge of cost management for companies, between sustainability and artificial intelligence

One of the latest reports from Boston Consulting Group (BCG) focuses on costs, a very hot topic at the moment. In fact, with the entry of Exg in company counts, the introduction (at least possible) of new technologies, starting fromartificial intelligencethe entire process system could be completely revolutionized, but not without an input of investments relevant and the need, in some radical sectors, to new professionalisms with the consequent need to evolve those already present in the company. All immersed in a situation of instability which, despite some improvements, in no way suggests relaxing our attention.

Everything changes and everything will change, so it is not a question of cuts “in the usual way”, in which pruning is done here and there, and given that we are in spring, not even random “prunings” with perhaps immediate positive results but irreparable damage for the future. According to the BCG report, in the current economic context, thecautious optimism among business leaders is supported by tangible numbers: as many as 63% of top managers feel ready to manage further economic turbulence and an even more significant 68% declare they have the information necessary to make strategic investment decisions. This data suggests that companies are better equipped today to deal with tomorrow’s shocks, but the challenge persists keep costs under control in the long term.

The research also outlines how cost-cutting initiatives, despite a promising start, with 83% of programs meeting or exceeding initial savings targets, often clash with the reality of a difficult sustainability. In fact, a third of executives admit that costs are tending to rise, underlining the need for savings strategies that go beyond temporary cuts.

In terms of growth, the strategies differ geographically: while in North America and Asia the focus is on expanding product lines, in Europe the focus is on managing prices in response to inflation. The appeal of South-East Asia as a manufacturing hub and emerging market is underlined in the report, highlighting how 55% of companies interviewed consider this geographical area a priority for their expansion, despite the geopolitical challenges.

The Bcg document also puts the spotlight on the need for a corporate culture robust and adaptive, an element considered essential by over 60% of leaders. This culture should support continuous learning and the ability to translate strategies into measurable actions, crucial elements for navigating an ever-changing economy.

A final but certainly not residual point is how the relationship between innovation and cost management is intertwined and vital: the ability to invest in new technologies, such as AI, is strengthened by cost savings. BCG reports that for companies successfully navigating these tumultuous waters, reinvest

resources in innovation is not just a strategy, but a competitive necessity. With AI and digital emerging as primary sectors for reinvestment, a qualitative leap in business operations and exponential growth in productivity is expected.

Of course, size matters and will matter more and more and, with a careful eye on the fluidity of capital and regulatory evolution, the report anticipates a possible 40% increase in merger and acquisition activitiesoffering a new dynamic in the global business landscape.

Bottom line, the numbers speak for themselves: taking a holistic, forward-looking approach to cost management is not just prudent, it’s essential. According to the Bcg report, companies that move with strategic wisdom today will be those that thrive tomorrow, exploiting every opportunity to consolidate a lasting competitive advantage.

*Director of Mark up And Gdoweek