How to minimize costs with the use of Data Analytics

An effective cost-management strategy will enable performance in an organization. But most often than not organizations forget to establish three levers for success.

1) Establish clear KPI's. 2) Consistency in Data Management 3) Collaboration and communication among stakeholders.

Once these three levers are leveraged, budget managers can now look at which costs to cut, what to invest in and also look at innovation and research.

According to Gartner only 43% leaders achieve their cost-saving targets and only 11% sustain cost-saving for three consecutive years. The problem is poorly designed cost savings.

Clear KPI's and OKR's: A clear definition of your KPI's is a part of the problem you should tackle with first. It looks easy on the outside but maintaining the discipline to track those KPI's is the hard part. Once you define what success looks like with the objectives and the key results you have set, you can clearly understand what to work hard for. According to Gartner if you have clear measures for success you are 2.5 times more likely to succeed at cost management.

Often cost-management is associated with cutting costs by firing people, reducing investments in R&D projects or by reducing the quality of products. But it shouldn't have to all the time. The solution- A single Data Analytics view that shows all your business lines that directly contribute to your Goals and Objectives. This way you can exactly pin-point which value-groups are bringing revenues and value even if it means in the long run. This analytical approach can also help in predicting outcomes which can in-turn reduce penalization value streams which can bring value in the long run.

Consistency in Data Management : A consistent tracking management of KPI's and OKR's can be time consuming but will bear results in the long run. when it comes to tracking them, it is also essential to prioritize them. That way one can prioritize measures you would adopt to fulfill those KPI's.

Collaboration among Stakeholders : Communication is the key to leading any strategy. Tracking business goals and objectives would require proactive communication and collaboration among stakeholders and departments.

According to a Gartner's report Cross functional collaborations are 1.5 times more likely to report better performance.

A consistent tracking and getting analytical insights will help in reducing costs not only in the short term but more will cater to long term goals.