Consumer Goods Technology

that will squeeze their margins tighter than ever. The deteriorating economic picture will further compound the outlook as even some of 2008’s key growth areas lose aspects of their appeal. Today’s CG companies are experiencing:

•Potentially a slowing of consumer demand as consumer confidence and disposable income are squeezed

•Consumer pressure for “greener” products and sociopolitical pressure to collaborate

“The low-hanging fruit has been taken, so a focus on more efficient organization is required.”

— BRIAN GIROUARD, CAPGEMINI

•Continued brand equity loss, particularly in developed markets and categories with a high proportion of private-label goods.

•Brand hyperventilation: an unprecedented number of brand extensions resulting in more consumer choice than ever but also more unprofitable SKUs

•Further stagnation in developed markets with softening economic conditions

and reduce CO2 emissions

•The trade-off between reaching profitable consumer groups with fragmenting media options and tightening marketing budgets

•The continued pressure on direct and indirect input costs coupled with a growing issue of securing supply as governments and organizations buy up suppliers and sources

•The burden of expensive

operating models caused by rapid expansions into growth markets and partially integrated acquisitions

•Complex and expensive ERP platforms, which have only partially enabled the business change promised

Many CG companies have already undergone initiatives such as process improvement and cost reduction in raw materials. The low-hanging fruit has been taken, so a focus on more efficient organization is required. While CG companies certainly need to keep a tight rein on costs, they must also build organizations that are capable of surviving and growing to withstand the volatilities of the longer term.

How will the recession affect technology spending in 2009? Do you expect any one category to flourish or to flounder? C O L E M A N : CG companies are being smart and continuing to

focus on programs that can yield real value to the business operations. Most major project initiatives with sound value propositions and business relevance have stayed the course as companies remain focused on the strategic benefits that will give them an edge when the economy rebounds.

Everyone is looking for short-term investments with quick returns, but high-performers are also keeping an eye on the long-term impact of this activity.

In 2009, we see companies investing in tools that help them manage working capital and the cost to serve. Technologies that enable improved forecasting accuracy and integrating demand and supply plans are in this category.