Value Add is Taking Precedence Over Cost Cutting — This is a Good Sign

The Summer issue of the CPO Agenda summarized their most recent six month survey in growth curve which found that a broader focus on value adding instead of cost cutting alone is emerging, highlighting once again that businesses are gearing for growth. This is a good sign. As SI has been repeating again and again over the last few months — a Supply Management organization will not advance to the next level unless it adopts, first and foremost, a focus on value and advances beyond operational excellence to a state of strategic business enablement.

There is still a pressure to reduce and control costs, as 2/3rds of organizations are reporting an intensified pressure to reduce costs, but this is down 25% from six months ago, which means the leaders (who never compromise more than the top 20% of organizations) have shifted their sights back to value. Plus, only 1/4 of the organizations are reporting delayed investment decisions for new technology or expert consulting, down from 1/2 a mere six months ago. Plus, 41% of organizations said they are preparing for growth and recovery and 2/3rds of organizations have either undergone a transformation program in the past 12 months or are planning one with the number one goal to achieve greater alignment with the business. Good news indeed. Let’s hope that these organizations follow through!