KPMG enlightens organisations on cost optimisation, tax efficient operations

The need for organisations operating in Nigeria to optimise their costs of doing business and consider the tax efficiency of their supply chains was the focus of KPMG Cost Optimisation breakfast seminar on Tuesday in Lagos.

Speakers at the event explored issues and challenges associated with cost optimisation in organisations operating in Nigeria and shared insights on effective cost optimisation strategies that can be adopted by organisations for sustainable performance and creating tax efficient operations.

Andrew Williams, partner, management consulting, KPMG UK, said the barriers to optimising cost structures in organisations include inadequate processes to drive cost reduction, lack of transparency on costs across the organisation, difficulty in measuring cost savings, insufficient incentives to reward prudent cost management, too much reliance on cost avoidance rather than increased cost efficiency, poor implementation of cost saving programmes, insufficient investment in information technology, among others.

“Cost optimisation should not be viewed as the only thing. There are balancing variables like mitigation of risks and the risks could be in terms of quality control, stability of location and a number of things,” he said.

Cost optimisation is important to every company, particularly in a country like Nigeria where there is high cost of doing business. It is an area where every company needs to look at in order to be able to improve their bottom line, said Wole Obayomi, partner and head, consumer markets line of business, KPMG Nigeria.

He stated that cost optimisation is about promoting efficiency in operations such that it leads to reduction of costs, adding that organisations needs to approach cost optimisation proactively and entrench it as a culture for sustainable performance.