01Savings that come back
Most leadership teams have run a cost-out program that hit its number, then watched the cost base drift back up.
Gartner found that 43% of organisations achieve the cuts they set out to make in the first year, and only 11% keep their savings for three consecutive years. Cost is still at the top of the list. In Gartner's August 2025 survey of more than 200 CFOs, 56% ranked enterprise-wide cost optimisation among their top five priorities for 2026.
Bapcor shows the pattern in public numbers. In FY25 it delivered $27.5m of savings and exited or relocated 70 sites, and its total cost of doing business fell by $3.7m. A year later, cost of doing business was $719.6m, up from $669.1m, and Bapcor's results presentation named the "complexity of processes and systems" as a barrier. Why savings don't stick after acquisitions covers the case in full.
The pattern has one cause. The program took out cost and left behind the complexity that creates it.
02Four doors complexity comes in by
Complexity rarely arrives through a bad decision. Each piece made sense at the time.
- M&A. You buy a business and inherit its systems, products, entities and ways of working.
- Legacy. The old platform is too risky to touch, so everything new is built around it.
- Growth. Every new product, customer deal and channel was a good call on its own. Nobody goes back and switches the old ones off.
- New tools and AI. Each one solves a problem and adds another layer to run, govern and pay for.
03The complexity tax: four places you pay
The cost of carrying all of it is a complexity tax. It sits on every line of the P&L, spread thin enough that nobody owns it.
| Where you pay | What it looks like | The number to put on it |
|---|---|---|
| Run cost | Month-end takes ten days where five would do. Reconciliations, payables exceptions, and a consolidation spreadsheet only one person understands | Days to close |
| Cost to serve | Nobody can see what a product or customer really earns, so the ones that look fine on revenue keep getting funded | Share of revenue where you know the true cost to serve |
| Valuation discount | Due diligence finds the complexity in week one, and the buyer prices it in | What a buyer would find in week one |
| Change cost | Every project costs more, because it has to touch everything | Actual against planned cost on your last five projects |
Most leadership teams can put a number on one of these four. Some can manage two. A tax nobody has measured can't be cut.
04Five places it settles
Once complexity is in, it settles in five places. Score your organisation from 1 (we have no idea) to 5 (we know, and we act on it).
| Place | What it sounds like | The question to score |
|---|---|---|
| Portfolio | "400 SKUs, and 80 make the money" | Do we know which products and customers make money after full cost to serve? |
| Customers and channels | "Every big customer has its own price list" | Does every segment and channel earn the complexity it brings? |
| Process | "Three ways to approve a purchase order" | Do our core processes run one way, or one way per site, entity or acquisition? |
| Systems and data | "Two ledgers since the acquisition" | Is there one version of the numbers without a reconciliation spreadsheet? |
| Structure | "An entity nobody remembers the reason for" | Does every entity earn its keep, and would a buyer see it that way? |
Your lowest score is where you pay the most tax.
05Paid for or carried
Some complexity is the reason customers choose you. The test is whether the customer pays for it, or you carry it. Two questions sort every product, deal, report and entity: does the customer value it, and what does it cost to carry?
| Customer view | Cheap to carry | Expensive to carry |
|---|---|---|
| Customer values it | Keep. The range customers choose you for. Leave it alone | Price it. The same-day delivery customers love and nobody has ever charged for |
| Customer doesn't value it | Standardise. A custom price list for a customer who would stay anyway. Fold it into the standard | Exit. A product line or report nobody would miss. This is where the money is |
One question settles most Exit decisions: who would notice if it was gone tomorrow?
06Stop, move, switch off
Taking something out of the business happens in three steps, and the savings sit almost entirely in the last one.
- Stop. Take it off sale. Easy, and it saves almost nothing.
- Move. Migrate the customers, contracts and data. Hard, and it saves a little.
- Switch off. Decommission the system, close the entity, exit the product. This is where the money is.
Many programs finish at step one. The product is off the shelf, and the system, the data and the people supporting it are all still there.
The bill also comes first. Our team has led a banking simplification program for a major Australian bank: the plan and business case to decommission around 80 systems and cut 193 products to 45, for around 6 million active customers, with $300M+ a year in forecast savings. In a plan like that, the savings arrive as each system is switched off, years after the investment starts. That timing is why simplification is hard to fund, and why it needs the CEO and CFO backing it together.
07Simplify first, then automate
The instinct with a complex process is to automate it. Automating complexity makes it more expensive to run, govern and change. New engine, same factory explains why, with a century-old lesson from electrification.
The order that works: simplify first, then redesign the work, then automate. Redesigning the work starts with sorting every step into Process, Judgement or Control. Which approvals are real controls applies that sort to the month-end close.
08Where to start this month
Your lowest score picks the first move. None of them needs a budget or a steering committee.
- Portfolio: run full cost to serve on your top 20 products or customers.
- Customers and channels: count the price lists.
- Process: map one process end to end with the team that runs it.
- Systems and data: count the month-end reconciliations.
- Structure: list every entity and what it costs to run.
Then put a number on the four places you pay. If you can measure all four, you can start switching the tax off, one piece at a time.
Notes and sources
- First-year and three-year savings (43%, 11%): Gartner press release, 26 October 2020
- CFO priorities for 2026 (56%, 200+ CFOs, August 2025): Gartner press release
- Bapcor FY25 savings, sites and cost of doing business: Bapcor FY25 results announcement and FY25 annual report
- Bapcor FY26 cost of doing business and "complexity of processes and systems": Bapcor FY26 results presentation
- Banking simplification figures: Transformativ case study