IT Seen as Growth Engine for CPGs
Almost 75% of the CPG CIOs surveyed cite supporting business growth as a top IT objective. Only 20% of respondents agreed with that statement in 2010.
CPG companies have successfully invested in digital and social media, smartphones, and tablets to drive brand engagement.
Analytics and big data offer new tools for exploiting information to yield valuable, real-time insights into consumer behavior and sales.
As the role of IT increasingly moves closer to the front and center of business operations, CPG CIOs can play a key role in delivering these new capabilities to the business.
“CIOs must leverage their command of analytics to lead initiatives in these areas while maintaining fiscal discipline,” the report notes.
IT leaders who do not meet the new demands of their executive-leadership teams may be sidelined as other departments, like marketing, take the lead in exploiting new technologies.
IT funding remains tight, with growth in IT operating expenditures in 2013 trailing revenue growth. This year, operating expenses are 3% higher than last year, and are growing less than the projected revenue growth, which is expected to be 5%.
Because of tight budgets, most CPG companies are in the early stages of implementing new technologies. None of the survey participants have fully deployed big data solutions, for example.
Most CPG companies outsource a low proportion of their IT services: the median company outsources only 32% of IT. The survey found no evidence that outsourcing leads to lower IT costs: median IT operating expense as a percentage of revenue was higher for significantly outsourced companies than for minimally outsourced companies.
The survey found that rapid adopters of new technologies spend proportionally less on IT infrastructure, as opposed to applications, than those taking a more conservative approach to adopting new technologies.