4 May 2011 | Lindsay Clark
Senior finance managers expect the vast majority of costs they worked hard to remove during the recession to return as businesses recover.
A survey of 525 senior finance managers in firms across Europe by consultancy firm KPMG found that the majority were concerned that more than 95 per cent of cost reductions and streamlining achieved during the downturn would come back as they strove for growth.
Finance managers were concerned about the return of supplier and raw materials costs. However, their influence on the cost base varies according to sector. For example, in consumer goods manufacturers, 61 per cent of supplier costs were expected to return, while the figure was just 13 per cent in financial services.
Martin Scott, partner, KPMG performance and technology, said: “Only 12 months ago, most companies were single-mindedly focused on cutting costs in an all-out effort to withstand the financial crisis. Worryingly, business leaders now expect the vast majority of costs they worked hard to shed to come surging back.
“Organisations need to redouble their cost-management efforts to make sure that their recession-driven cost improvements are not lost in the exhilaration of renewed growth.”
In December last year, the SM100 survey of procurement professionals found that cost reduction remained the most significant item on the agenda for 2011.