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Innovation can serve as a powerful means
for improving efficiency and driving

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margin improvement. To
achieve cost excellence,

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leaders should take advantage of new
technologies and tools and even consider

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the way their organizations
approach innovation itself.

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A conventional way to approach a cost
transformation exercise is to look at

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standard efficiency levers. Whilst
there is sufficient value sitting there,

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I feel a needle mover or a big change
happens when you fundamentally reimagine

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the process. What if you were to
do this completely differently?

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You're actually looking at a 30 to 40%
reduction by re-imagining the process and

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eliminating many chunks.

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It often not only results in a
better or a lower cost structure,

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but a more effective process as well.

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It's a great question.

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We've found that the combination of
more traditional or predictive AI and

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generative AI is incredibly amplifying
when you think about value creation.

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And we find that there are
value opportunities both
in unlocking new top line

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gains that allow you to get
better leverage out of your
cost base and in taking

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cost out so that you can flow
more through to the bottom line.

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And we're finding this in every
industry across the entire value chain.

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You think about commercial use cases,

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how you better engage your
customers - B2B or B2C customers.

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The area that we're seeing the most
investment in currently for manufacturers is

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AI. Manufacturing is a data rich environment
generating one terabyte of data per

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day for the average manufacturing plant.

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And you can use this data combined
with the power of AI to make better

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day-to-day decisions. Areas
like scheduling, areas
like maintenance, quality,

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even the SAP points that you
run your manufacturing line to.

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How should leaders be thinking
about costs and innovation?

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A critical element of looking at
costs in your innovation spend

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is ensuring that costs are
aligned with strategic priorities.

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Looking at the innovation portfolio,
where are the dollars going?

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What strategic part of your enterprise
strategy do those spends align to?

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And what is needed and what is not is
a critical element of tackling costs in

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innovation in R&D.