PHILADELPHIA, March 12, 2012 (GLOBE NEWSWIRE) -- More than half of Fortune 1000 executives are focused on cost reduction strategies for delivering earnings and funding growth in 2012, according to a recent survey commissioned by Procurian, formerly ICG Commerce, and conducted by Harris Interactive. Administered to more than 300 Fortune 1000 executives, the survey finds that in the coming year 60 percent of respondents will focus on non-people related cost reductions as the major source of funds for investments in innovation and growth.
Key Findings of the Survey Include
- 52 percent of executives polled list cost reduction either as their top strategy, or within their top three strategies for delivering earnings and funding growth in 2012
- 60 percent say they will focus on non-people related cost reductions, as opposed to 30 percent that will turn to layoffs or downsizing
- Half of Fortune 1000 executives say reducing indirect and non-product input costs could provide significant savings, without disrupting business
- Fortune 1000 executives cite limited resources, large, disparate organizations and lack of information as reasons why managing indirect spending has been a challenge for them
- More than 70 percent of executives polled say that their purchasing group does not play a highly strategic role, with global impact, in managing indirect and non-product expenses
"With the slow growth that we've seen globally, it's no surprise that companies remain focused on managing costs in 2012," said Carl Guarino, CEO of Procurian. "What's unique about this data is that the majority of companies are focusing on their indirect costs, which is an area of spending that has been largely undermanaged in the past. As companies have exhausted other cost reductions such as layoffs or downsizing, they've started to look elsewhere for savings that can be used to improve margins or fund product innovation and growth and have identified indirect spending as a significant source of savings."
The New Procurement
With its unique industry perspective, Procurian examined the findings of this survey, combined with the trends and results it has experienced with its clients. The company used these insights to define an advanced approach and operating model called The New Procurement. This philosophy calls for a fundamental shift in the way companies manage spending, particularly indirect spending, and is the foundation for "The New Procurement Manifesto," Procurian's definition of the new operating model and the six underlying principles of this new standard of excellence.
"For our clients, and the market at large, The New Procurement is no longer an option – it's an operational necessity to unlock savings in order to drive innovation and fuel growth," said Guarino. "The results of this survey, coupled with our findings from collaborating with our Fortune 1000 customers, make it clear that now is the time for business leaders to transform the way their organizations view indirect spending. In today's business environment, they must find ways to maximize the business impact of every dollar spent and finally capture the hundreds of millions of dollars being left on the table."
Developed and embracedby Procurian and its clients to achieve the next level of value and impact from procurement, the proven tenets of The New Procurement are as follows:
The Six Principles of The New Procurement
- Procurement should address 100 percent of spend globally
- Procurement must support sustainability and corporate social responsibility objectives
- Procurement must apply real-time market intelligence
- Procurement must deliver realized savings and continuously optimize spend
- Procurement must enable agility and mitigate risk
- Procurement must actively identify and deliver new sources of savings and innovation to fuel growth
Hear F1000 executives share their perspective on The New Procurement
About the Executive Omnibus Survey
The Executive Omnibus survey was conducted by Harris Interactive® within the United States during Q3 of 2011 among a total of 304 Fortune 1000 Executives. The survey is a measurement of sentiment and confidence from business leaders.
About Procurian, Inc.
Procurian is the leading specialist in comprehensive procurement solutions. Transformational business leaders partner with Procurian to drive sustainable changes to their cost structures on an accelerated basis. Our built-out Specialized Procurement Infrastructure™ integrates with your business to optimize spending and deliver real savings that equal a margin point or more. Procurian is an ICG (NASDAQ: ICGE) company.
The Procurian, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6920