Cutting costs by a flat percentage in every department usually harms the areas that work well, while the waste sits somewhere else entirely.

This work is closely related to but distinct from working capital optimization, which addresses the timing of cash flows. Cost optimization addresses the level of spend itself, and the two are often assessed together because they draw on much of the same financial data.

Why blanket cuts usually backfire

An across-the-board percentage cut treats an underperforming cost center the same as a well-run one. The well-run area has less slack, so the cut lands on work that matters. The waste in the underperforming area goes untouched because nobody looked closely enough to find it.

What a proper cost review does

It benchmarks cost categories against what is realistic for your business type and scale. It separates costs that should scale naturally with revenue from fixed costs that deserve scrutiny regardless of performance. And it identifies specific, named opportunities instead of an arbitrary target percentage applied uniformly.

A hypothetical example

A Riyadh holding company applies the same cost reduction target to a capital-intensive manufacturing arm and an asset-light trading business. The two have fundamentally different cost structures, so the real savings sit in different places in each.

Connecting to broader efficiency work

Sustainable cost reduction usually comes from fixing an inefficient underlying process, not from cutting the budget allocated to it. That is why this work often connects to business process improvement and productivity improvement instead of standing alone as a pure cost-cutting exercise.

What the work delivers

A prioritized list of specific, named savings opportunities instead of a single blanket target, separating quick wins from those that require process redesign. An implementation plan tracks whether identified savings are captured, not only projected on paper.