A new joint report from EY and Chartered Accountants Australia and New Zealand (CA ANZ), Driving finance transformation: tackling key challenges in cost allocation for strategic success, highlights this shift. The report draws on insights from more than 90 finance leaders across Hong Kong, Malaysia, the Philippines, Singapore, Thailand and Vietnam. It explains why cost allocation is now a critical lever for transformation and why many organisations still struggle to get it right.

The Big Shift: From Efficiency to Agility

Before the pandemic, most finance leaders focused on:

• cost efficiency
• revenue growth
• enterprise and regulatory risk.

Today, revenue growth and organisational agility lead the agenda. Finance teams must interpret numbers, uncover opportunities and support decisions quickly. Yet only 31 per cent of leaders surveyed say they are making meaningful progress in finance transformation. Common barriers include weak change management, difficulty finding the right implementation partner and challenges in securing funding.

Why Cost Allocation Matters More Than Ever

More than half of respondents say cost allocation is important to their current strategic priorities. This reflects a simple truth: organisations cannot grow sustainably if they do not understand the true cost of growth.

Effective cost allocation helps organisations:

• clarify cost and value drivers
• improve profitability analysis across products, services and markets
• strengthen collaboration between finance and other business units.

When cost allocation lacks structure or accuracy, it creates confusion and slows decision-making. When done well, it becomes a strategic advantage.

The Barriers Keeping Organisations Stuck

The report identifies four recurring challenges that limit effective cost allocation:

• data silos that block clear insight
• inconsistent terminology that causes confusion
• manual processes that delay reporting
• human resistance to change, which remains the biggest blocker.

These challenges limit finance’s ability to support strategic agility and confident decision-making.

A Foundation for Sustainable Growth

Cost allocation is more than an administrative task. It underpins profitability analysis, resource planning and strategic financial management. As finance teams take on a more advisory role, robust allocation frameworks and meaningful KPIs become even more important.

For finance leaders who want to future-proof their organisations, the direction is clear. Strengthening cost allocation is essential to lifting performance and enabling sustainable growth.