Consumer packaged goods (CPG) companies are searching for new and innovative ways to grow top-line sales in a global marketplace that seems to be more competitive every day. Like every business, they must find a way to offset the rising costs of raw materials as well as meet ever-changing consumer needs.
There is a trend, not only with CPG companies, to renew efforts on customer-oriented initiatives. Rob Carter, the CIO of FedEx, said in an interview with Fortune magazine (April 3, 2006) they will “focus a little more on revenue-generating, customer-satisfaction-generating, strategic advantage technology. The key focus of my job is driving technology that increases the top line ... ”
Product innovation and acclimation to new markets are still key drivers to success. So information flow and collaboration among suppliers, customers and partners become even more critical. This need, and improvements in technology, has renewed the demand for expanded business intelligence capabilities. This results in the necessity, from a technology perspective, to revisit master data management activities and integration strategies.
Product lifecycle management is also hot as companies continue to look for ways to reduce cycle times and bring new ideas to market faster and more efficiently. Everyone wants to implement new technologies for demand-driven supply networks, and we continue to hear the hype around radio frequency identification (RFID), although it seems to have died down somewhat.
To stay ahead of the competition, while mitigating risk, requires discipline and an enterprisewide focus. Business transformation/evolution becomes even more difficult when you consider the average company’s IT budget allocates 75 percent to maintaining existing technology, applications and systems (Forrester Research, Inc., 2005).
Many leading companies are investigating outsourcing noncore functions. This can reduce costs, but it also focuses resources on innovation and core business improvements. Most outsourcing generally is organized into three areas: IT outsourcing, applications outsourcing and business process outsourcing.