**Global**: A survey reveals that cost management is the primary focus for executives globally as they prepare for 2025, with 40% feeling unprepared for market shocks. The report highlights a shift towards AI and advanced analytics in cost-reduction strategies amid ongoing market uncertainties.
Business leaders globally are approaching 2025 with a heightened focus on cost management, which has emerged as their top priority for the third consecutive year. A recent survey conducted by Boston Consulting Group (BCG) found that this focus has increased by eight percentage points compared to 2024, with nearly one-third of executives listing cost management as crucial amid ongoing market uncertainties.
The survey, which surveyed over 570 C-suite executives across various industries worldwide, highlighted a significant concern: 40% of business leaders feel unprepared for potential market shocks in 2025, as they grapple with the implications of inflation, rising interest rates, and geopolitical shifts such as changes in US tariffs and regulations. Despite these challenges, many executives maintain a degree of optimism regarding growth opportunities, with around 67% of respondents planning to reinvest savings from cost-reduction strategies into innovation and expansion elements, including sustainability and operational excellence.
A striking trend noted in the survey was the intention of 86% of executives to invest in artificial intelligence (AI) and advanced analytics as part of their cost-reduction efforts this year, particularly within customer service, sales and marketing, and supply chains. This shift indicates a growing recognition of AI’s potential to enhance supplier relationship management (SRM) by analysing unstructured supplier data and extracting valuable insights to improve collaborations and efficiencies.
Moreover, the survey finds that executives face challenges in executing their cost-saving targets, having achieved only an average of 48% of their goals in 2024. This underperformance correlates with a 9 percentage point shortfall in shareholder returns when compared to peers who meet their cost management targets.
Notable priorities identified among the executives include supply chain optimisation, particularly in the consumer and industrial sectors, and operating model improvements in healthcare and industrials. Experts urge that effective cost management must be tailored to enhance a company’s competitive advantage. “In a complex and challenging environment, global executives are zeroing in on effective cost management as the primary tool for growing margins,” noted Paul Goydan, a managing director and senior partner at BCG.
As executives navigate a landscape fraught with uncertainties, the emphasis on leveraging data and advanced technologies remains a pivotal strategy for organisations looking to thrive in 2025.
Source: Noah Wire Services
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