CFOs at a crossroads: The strategic choice between austerity and growth
AI is playing a pivotal role in today’s era of cost optimisation. Using technology to achieve more with less reflects a shift in mindset. And it’s not limited to asset-intensive industries.
For decades, business leaders have experimented with countless methods of maximising productivity and minimising costs.
Frameworks like activity-based costing and economic value added became part of the managerial lexicon, promising smarter ways to protect margins and align budgets.
With the Fourth Industrial Revolution now well under way, these have become central themes in boardrooms and politics alike. But today’s business environment demands more than smart cuts.
Amid rising input costs, fragile supply chains, technological disruption and relentless growth targets, CFOs must rethink the purpose of cost management. Rather than treating cost control as a defensive strategy, many are now being urged to proactively view cost optimisation as a growth enabler.
This shift is more than semantic. While traditional cost reduction might involve headcount cuts or tightening discretionary spend, cost optimisation is about creating long-term value.
It means identifying structural inefficiencies across the enterprise – whether in private businesses or public institutions – then reinvesting savings into innovation, digitisation or market expansion, all while making organisations and the communities they serve more resilient.
Deloitte research shows organisations are increasingly aligning cost initiatives with broader strategic goals. Across vastly different markets, they share a common aim: use cost levers not only to survive, but to thrive. Four themes are driving this shift to cost optimisation.
Investing now to save later
Historically, pursuing short-term savings often compromised long-term capability. But organisations are now flipping that equation.
Power and utility companies, for example, are moving away from traditional operating models to embrace decentralised systems powered by distributed energy resources such as rooftop solar and electric vehicles.
They are supporting this by investing in digital technologies that allow real-time data to flow in both directions, enabling smarter distribution and limiting reliance on expensive infrastructure.
These choices are in both the core and enabling areas of an enterprise. For example, investing in intelligent forecasting systems and real-time performance monitoring can help finance teams create more value in the organisation beyond analysis.
Breaking down organisational silos
Breaking down organisational silos is critical to unlocking cost efficiency at scale. Too often, functions like finance, marketing and operations pursue cost savings in isolation, unaware of how their decisions affect the broader organisation.
Generative artificial intelligence (Gen AI) is accelerating a shift in how information is shared and decisions are made. In finance, routine reporting can be automated, while natural language platforms deliver tailored, real-time insights to leaders driving productivity improvement. Across public and private sectors, teams can query shared project information using natural language, reducing delivery friction and making workers more efficient and effective.
Strategic partnerships for core capabilities
Outsourcing used to be about removing non-core tasks. Today, that model is evolving.
Companies are increasingly looking for partners who can contribute to innovation, efficiency and even customer experience. Some retailers, for example, are outsourcing planogram creation – a method of visualising product placement on shelves – to third parties with better technology and specialised talent. Others are reimagining service delivery models to unlock value through offerings like kerbside pickup in shopping centres, streamlining logistics for tenants and convenience for customers.
Risk management is also transforming.
As data privacy and cyber security become central to maintaining customer trust, consumer-facing businesses are partnering with expert providers to manage these risks, reducing fixed costs and providing more scalable, responsive and outcomes-focused delivery models.
Technology as a cost management enabler
AI is playing a pivotal role in today’s era of cost optimisation.
In the energy sector, drones paired with AI platforms are helping utilities inspect power lines more efficiently, reducing reliance on costly manual inspections while minimising climate-related risks like bushfires.
This kind of targeted investment – using technology to achieve more with less – reflects a shift in mindset.
And it’s not limited to asset-intensive industries. Across sectors, AI and advanced analytics are improving forecasting, enhancing workforce management and strengthening customer engagement, all while keeping costs under control.
Increasingly, agentic AI is playing an important role where the front office meets the back office – solving complex problems in the operational “messy middle” as these new digital workers help simplify enterprise operations.
A broader agenda for CFOs
For Australia’s CFOs, the implication is clear: finance’s role in strategic leadership is expanding – fast. With boards and CEOs pushing for growth despite tighter margins, CFOs are uniquely positioned to champion smarter, cross-functional investment in both technology and talent.
This doesn’t mean abandoning cost discipline. It means aligning cost control with business priorities, investing in tools and partnerships that drive innovation and building resilience in an increasingly volatile environment.
Realising these opportunities requires more than smart tools – it demands clear change leadership and strong executive alignment in both corporations and institutions. That includes defining shared goals, agreeing on risk appetite and uplifting capabilities for transformation at scale. This shift may seem subtle. But for CFOs navigating today’s complexity, it’s nothing short of transformational.
Giselle Hodgson is National Market Leader - Operational Efficiency & Resilience and Partner at Deloitte Australia.
-
Disclaimer
This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser.
Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.
About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. Please see www.deloitte.com/au to learn more.
Copyright © 2025 Deloitte Development LLC. All rights reserved.
-
