New Delhi - Indian companies are planning to have the highest cost reduction targets, driven significantly by "growth objectives" and to gain competitive advantage, according to a cost survey released on August 17.
Deloitte's first Biennial Cost Survey report titled "Thriving in uncertainty", which provides insights on cost improvement practices adopted by large and mid-size companies in India and Asia Pacific region, captures responses from more than 299 business leaders.
"Indian companies have set the most aggressive cost reduction targets in the APAC region, with 44% of companies looking at cost reduction targets of up to 20%," Deloitte Touche Tohmatsu India LLP's Partner, Gaurav Gupta said.
He, however, said 63% of companies have reported failure in meeting cost reduction targets in the past.
Thus, it is imperative for companies to focus on more strategic cost reduction initiatives that can be implemented and sustained through a structured cost reduction programme, he said.
Over 80 business leaders in India were part of this survey.
The study highlights cost reduction across all industries ranging between 92% in financial services and 100% in consumer and industrial products (C&IP), the public sector, life sciences and healthcare.
According to the survey, Indian companies are also seen to be aggressively pursuing the full range of cost reduction with sales growth being the top priority followed by 'organisation and talent' and 'balance sheet management'. The top two drivers for cost reduction are growth oriented.
Over 95% of companies in India will seek to implement cost reduction programmes. While 55% companies are expected to view cost reduction actions from a tactical lens, 49% companies will approach cost reduction from a strategic point of view, the survey added.