 Cost management is still a top priority. However, making meaningful cost reduction without affecting performance is easier said than done. This article discusses "a structured and pragmatic approach to zero-basing can help achieve sustainable cost reduction while protecting key activities."
"Though world economies show some signs of emerging from recession, cost management remains a top priority and a key performance driver for most companies. Many businesses have weathered the downturn by addressing easily accessible cost reduction opportunities. However, making significant and sustainable cost reductions without threatening performance and competitiveness is more difficult because many companies are unable to systematically identify and analyze the full range of activities undertaken by the business and the associated costs and business impacts. For that reason, there is increasing interest in the concept of “zerobasing” cost and activity levels, an approach in which costs are tackled at the root by reexamining each corporate activity as if it were brand-new. Although the concept of zero-basing is understood in theory, it is often misapplied. A structured and pragmatic approach to zero-basing can help achieve sustainable cost reduction while protecting key activities."