Sources of information and trends
Strategic cost transformation, new tools to support CFOs and governance of state-owned enterprises are among the highlights of this edition.Setembro-Novembro | 2018
Cost management as a competitive advantage
The concept of “strategic cost transformation” comes to prominence beyond the moments of crisis and becomes a key resource in business planning.
With disruptive technologies increasingly present, companies are faced with the need to create new strategies to keep pace with innovations and make business more profitable. The strategic cost transformation appears in this context as an essential tool to maintain the good functioning of the organizations and to leverage new opportunities.
The study “Cost Transformation in the Age of Digital Disruption”, carried out by Deloitte, analyzes the trends of strategic cost reduction and how they are applied by companies to respond to market demands. The survey was responded by about 1,000 C-level executives from four major regions – USA, Latin America, Europe and Asia-Pacific.
The study points out that cost transformation is an important tool to thrive in times of uncertainty, regardless of whether companies show increase or decrease in revenue. According to the survey, 86% of global respondents estimate that their organizations should implement cost reduction initiatives over the next two years. The companies reflect that the main motivations for this practice are linked to growth, as they seek both the competitive advantage and the protection of instabilities in relation to costs.
Despite the high adherence to cost transformation reflected in the survey, 63% of companies fail to achieve the stated goals – an indication that they should consider the adoption of exponential disruptive technologies as a decisive factor in leveraging the efficiency and effectiveness of their organizations, enabling new business models and improving profit margins in a systemic way.
Access the study “Cost Transformation in the Age of Digital Disruption” in its entirety.
Health in focus for consumer goods companies
With the increasing life expectancy of the world population, industry organizations innovate in products and implement life-quality programs.
The population’s rising concern with the origin and quality of products, as well as with the growing occurrence of diseases such as diabetes, hypertension and obesity, has encouraged companies in the consumer goods sector to develop initiatives to favor the health and well-being both of their employees and of the community in which they are inserted.
The study “Health & Wellness Progress Report”, conducted by Deloitte in partnership with the Consumer Goods Forum (CGF), points out that organizations are more attentive to these issues and have undertaken initiatives to make both employees and customers adopt a healthier way of life. The survey inquired 83 companies in this segment.
In the survey, 82% of respondents said they had seen progress regarding health and well-being in their organizations – the rate was 70% in the 2016 edition. Eighty-five percent of consumer goods organizations said they have partnered with community leaders to enable joint solutions.
The study also found that companies have been reshaping their products to meet healthier criteria, including lowering rates of sugar, sodium, saturated fat and trans fat. A group of 85% of the participating companies are committed to implementing quality of life programs aimed at employees and the community, with the goal of disseminating habits such as diabetes prevention, hygiene care and physical activity.
Check out the complete “Health & Wellness Progress Report”.
State-owned enterprises are attentive to Law No. 13,303/16
Training and the maturing internal controls are the major challenges for these institutions to comply with the regulation.
Promulgated in 2016, Law No. 13,303/16 proposes the strengthening of both corporate governance and control and transparency mechanisms for Brazilian state-owned enterprises. Two years later, these organizations are aware of the rule, but face challenges to meet the legislation requirements.
The research “Governance in State-owned Enterprises – Challenges and Strategies to Adapt to the Requirements of Law No. 13,303”, conducted by Deloitte in partnership with the Brazilian Institute of Internal Auditors (IIA), examines how state-owned enterprises and mixed-capital companies are adapting to the new models defined by the Law and what are their main challenges to meet the new governance specifications.
Of the companies interviewed, 80% say they have a structured and formalized plan to put the new demands into practice. Forty percent of the respondents state that the changes have been applied at the executive levels, in order to adjust the organizational structure based on the Law – that is, the new rules for appointment of members of committees, boards and councils.
Training the professionals involved and little maturity regarding governance, risks and controls were the main obstacles identified to adapt to the new regulation.
CFOs focus on processes and revenue
Operational efficiency, strategy, compliance and new technologies are also at the top of the agenda of finance leaders, according to a survey conducted in Brazil.
Deloitte’s “CFO Survey 2018”, carried out in June with more than 100 finance executives working in Brazil, identified that efficiency in the finance, corporate strategy and tax compliance processes are the most interesting topics for CFOs at the time.
Seventy-four percent of executives indicated revenue growth as a top priority for the next 12 months following the survey, while cost reduction was remembered as a future priority for 26% of the respondents.
According to the survey, three out of four CFOs say they are more optimistic about the company’s performance next year, while almost two-thirds believe that the Brazilian economy will also improve in the same period.
Regarding new technologies, cloud computing and visualization tools are already widely or partially adopted by 77% and 49% of organizations, respectively. Robotics and advanced analytics, in turn, emerge strong on the radar of finance executives: 32% and 26% of respondents, respectively, said they were evaluating the use of these tools.
Access the “CFO Survey 2018”.