By Gemma Thompson

NEW YEAR, same pressures. Hardly into 2026 and it’s clear that businesses will continue to face financial headwinds, with interest rate hikes and new superannuation policies intensifying strain on P&Ls and cash flow. Those yet to think about contingency measures may already be behind.

Reacting to cost increases, after the fact, puts you on the back foot.

Often businesses approach cost reduction structurally – grand transformation programs, new platforms, wholesale restructures. While optimising the cost base is critical for long-term success, it’s slow, requires upfront investment, and demands extensive change management.

But what if fast savings are already sitting in your P&L, hiding in plain sight? Initial savings that can dampen upcoming hikes and set the tone for a more commercial culture. 

At Proxima, we call this approach ‘Stop Cost’ – rapid, real-time interventions to eliminate waste, negotiate improved commercials, claim unclaimed rebates, and better leverage supply requirements. It’s a commercial reset: identifying and eliminating unnecessary spend before it’s committed.

This means adding governance around purchases coming through the pipe. Business stakeholders justify the need, value for money, and commercial relevance of deals they wish to commit to. Where need is agreed but value falls short, procurement steps in to negotiate hard and fast with suppliers.

This isn’t archaic.

Suppliers face the same commercial pressure as your organisation. They expect negotiation and price it into deals, happily walking away with the spoils when businesses don’t commercially test offers, and procurement teams rarely have time or insights to do so en masse.

This isn’t about burning bridges. It’s about challenging deals and resetting them to market levels, creating a platform for mutual trust that enables rebuilding and collaborating on bigger, bolder initiatives for the future.

Here are five ideas for stopping cost in 2026.

1. Auto-renewed contracts you’ve stopped thinking about

Software renewals and rolling service contracts quietly eat budgets with automatic 3-5% annual increases.

If a contract has auto-renewed for three-plus years, you’re almost certainly overpaying with specifications that no longer match your needs. Create a renewal calendar, flag contracts 90 days before they roll, and ask, “Would we buy this again today, at this price?”

2. Things you’re buying but not using

Usage audits reveal uncomfortable truths: software licences for 500 people used by 50, premium service tiers when basic suffices. We led a pallet optimisation program for a large oil and gas client, reducing spend on new pallets and dumpster removal by implementing reusability. Every business has an equivalent. Eliminating unnecessary spend or downgrading over-specified contracts often saves 10-20% of category spend with zero operational impact.

3. Fragmented spend across multiple suppliers

Dual sourcing for resilience is smart. Paying five suppliers 10 different prices for the same thing without realising it? That is expensive and common in businesses with multiple divisions, mergers, or decentralised procurement.

Spend visibility is step one – you can’t consolidate what you can’t see. Once you understand where money goes, consolidating suppliers and leveraging scale becomes straightforward.

4. Tune into the opportunity in mid-tail indirects

Most organisations focus on direct spend while overlooking indirect categories like facilities, IT services, professional services, travel, and utilities.

Yet significant savings exist through relatively easy ‘buy better’ levers: re-tender cleaning contracts, consolidate uniform volumes, reallocate to best-price suppliers, run e-auctions for maintenance.

The market moves, competitors emerge – you could be paying 2020 rates in a 2026 market.

5. Supply chain inefficiencies

Recent years have taught procurement that supply chain resilience is key to weathering storms. Yet with all the focus on building measures – buffer stock, additional routes, packaging solutions – ask if these still correlate to actual market risk for your business.

Do you need that much stock? Can packaging be respecified? Is distribution optimised?

This route emphasises the governance and balance required when implementing Stop Cost, ensuring decisions don’t negatively impact broader business imperatives such as resilience.

Stop first, optimise second

Stop Cost programs require executive participation and finance stakeholder commitment to drive momentum and enable decisions at pace.

They need open mindsets from budget holders willing to challenge spend against business drivers – growth, reputation, customer service – not just accept requests at face value.

Done well, Stop Cost evolves into an ongoing cost-conscious culture.

The beauty of Stop Cost is speed. While transformation programs take months to design and deliver, stopping unnecessary spend shows results within weeks.

It’s not revolutionary, but in 2026’s margin-squeezed environment, it might be exactly what your business needs.

www.proximagroup.com/australia

ABOUT THE AUTHOR

Gemma Thompson is the principal consultant for Proxima Australia the local arm of a global procurement and supply chain consultancy that is part of the Bain procurement ecosystem. As procurement specialists, Proxima Australia works with many of the world’s leading businesses, providing strategic advice and hands-on delivery. 

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