Research Report
Zero-Based Transformation: The big reset
5-minute read
May 24, 2022
In brief
- Business leaders are in the midst of a perfect storm, facing record inflation, cost pressures, global volatility, and labor and material shortages.
- To navigate these challenges while meeting stakeholder demands and delivering growth, leaders are harnessing cost transformation.
- Zero-based transformation enables companies to reimagine the business, reset the cost base and invest in new strategic priorities.
Rethink. Reinvent. Transform. As executives maneuver today’s uncertainty, and as new disruptions seem to emerge daily, leaders are no longer focused on simply surviving the storm. They are living these three words to navigate the waters of unprecedented change.
In fact, nearly three-quarters (73%) of C-suite executives surveyed by Accenture have a cost transformation initiative under way or are planning one within six months.
But how can they harness the full potential of that cost transformation? By pointing their compass toward zero. Zero-based transformation looks beyond the present and doesn’t rely on the past to chart the future. Instead, it takes a holistic approach to cost transformation, starting with a clean sheet to:
- Rethink cost structures and resource allocation.
- Reimagine the business, reset the cost base, and free up funds.
The value of asset reallocation and freed funds? They can be used to invest in the strategic priorities that drive growth and to develop new capabilities that build resilience and agility for the future.
Going from zero to a hundred
Zero-based transformation is not a budgeting exercise. It’s about deeply understanding costs across the business and aligning to the priorities that will create value. To succeed, it must be an integral part of the organization’s design, driven by technology, integrating sustainability and empowering talent.
- Technology
Advanced analytics and other technologies are critical to monitoring and recalibrating costs in real time.
- Sustainability
Looking at the cost base through an ESG (environmental, social, and governance) lens helps companies balance cost and sustainability.
- Talent
Change requires employees—and leaders—who are engaged, and a culture that supports the change over the long term.
61%
of leaders are investing in technology including AI, digital tools and cybersecurity to optimize operations.
92%
state that cost transformations need to account for their impact on sustainability and responsible business.
88%
cited strategy and leadership as an obstacle, and 60% identified employee engagement as an issue in past cost transformations.
Resetting for growth
Transformations of the past—and their failures—can stay in the past. Today, cost transformations themselves are transforming, starting at zero. What are the keys to success? In our experience, there are four:
Leaders are thinking about today’s cost transformation in terms of growth, resilience and competitiveness. As they face today’s disruption and volatility, a zero-based approach can help leaders rethink their business to move beyond cutting costs—and set a course toward a cost transformation that breathes new life into their future.
Learn more about zero-based transformation’s role in funding new strategic priorities—read the full report here.