April 4, 2013

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CPG Industry: Key trends and challenges

“What are the most crucial changes and key trends impacting the CG industry in 2013, and what should companies do to effectively manage them?”. One key trend is the synergy between business and IT today, which is truly remarkable, in the past IT would only be concerned with technology based solutions, however IT now is very business oriented. Also, two primary trends — Big Data and New Marketing — occupy center stage. While companies are looking to data and analytics to provide insights on demand/ consumer buying patterns etc. the overlap between Data and New Marketing, where new consumer connections have led to a marketing being a mindset for all employees rather than an individual department, is the key. Also, while data and insights are critical to business decisions, they must enable visibility into overall KPIs —through effective IT, leading to true business and IT alignment.

As CPG manufactures continue to struggle with compressed cycle times, thinning margins and wavering consumer loyalties, business executives across our industry are increasingly reliant upon consistent, accurate and relevant data to make informed business decisions — either operational or strategic. While financial information will remain a fundamental measure of value, it is a lagging indicator of true business performance. To compete effectively, CPG executives require true visibility into real-time business process KPIs — and this can only be accomplished through IT. This will be the most important change to impact the CPG industry in 2013. So, how will this manifest itself? No organization can change business parameters without first understanding the detailed business process maps and identifying the key business process parameters that influence them. By investing in software tools and dashboards that take an enterprise-wide perspective, CPG companies can create an end- to- end, process-centric view of their businesses and provide insights into the working details of the process cycles. This “business aligned” IT model will enable all key business stakeholders to proactively identify inefficiencies and inaccuracies, rather than review reports reactively. For example, recently a large U.S.-based CPG company reduced its shrinkage by trending the business process KPIs that were influencing it. Finally, to keep this information current and dynamic, the entire framework must be tightly integrated with the applications support team of IT. Ownership of maintaining and updating this information would then lie with a team that enables and supports the business processes 24/7.

(* this blog refers the CGT 2013 Review and Outlook report from CGT).