KPMG survey shows cost cutting continues

Many organisations are planning further cost-cutting programmes and intend to make greater use of outsourcing service to compensate for reductions in internal resource, according to research from KPMG.

KPMG's latest Global Pulse survey suggests that nine out of 10 organisations now believe they have not gone far enough to reduce overheads.

Weak demand for goods or services cited by 44%, political and economic gridlock in emerging markets (60%) and ongoing uncertainty surrounding the global economy have combined to force businesses to renew their cost-cutting programmes, the report argues.

The findings show that more than one in four (28%) believe that poor senior level leadership skills are a barrier to progress, while 78% focus on dysfunctional or fragmented organisational structures.

The survey results also indicate that this lack of internal expertise led to increased demand for third-party business and IT services during the final quarter of 2012.

The poll of more than 20 of the world's largest business and IT service providers found that the majority (78%) showed pipeline growth during this period, a jump of 40% from the previous Global Pulse survey. More than half (59%) expect demand for business and IT services to increase between now and June 2013.

In recent months respondents report that 70% of requests for help have centred on IT projects, with just 9% of organisations seeking help with customer service. KPMG says this indicates cost-cutting is becoming more important than securing a loyal customer base in some instances.

Lee Ayling, a partner in KPMG Management Consulting said: 'There is an underlying concern that organisations no longer have adequate processes or skills in place to handle a potential upturn in demand. The result is that many are turning to technology and investing in reporting and analytics software to help make better business decisions faster.'

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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