Indian companies have set the most aggressive cost reduction targets in the APAC region, with 44 per cent of companies looking at cost reduction targets of up to 20 per cent, says a study.
Also, 95 per cent of Indian companies are more likely to pursue cost reduction as against the APAC regional average of 76 per cent over the next 24 months, according to Deloitte's first Biennial Cost Survey.
Sales growth, organisation and talent, and product profitability are the top focus areas for Indian companies over next two years, the report titled 'Thriving in Uncertainty' said.
The survey captured responses from more than 299 business leaders (CXOs, executives, and senior management) from large and mid-size companies in India, China, Japan, Australia, Hong Kong, and Singapore.
The top two drivers for cost reduction are growth oriented, with 'gaining competitive advantage' (60 per cent) and 'required investment' (63 per cent) cited more frequently compared to APAC average of 58 per cent and 51 per cent respectively.
"Indian companies have set the most aggressive cost reduction targets in the APAC region, with 44 per cent of companies looking at cost reduction targets of up to 20 per cent. However, 63 per cent of companies have reported failure in meeting cost reduction targets in the past," said Gaurav Gupta, Partner, Deloitte Touche Tohmatsu India LLP.
Gupta further said it is imperative for companies to focus more on strategic cost reduction initiatives that can be implemented and sustained through a structured cost reduction programme.
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