• Sustainability
  • Projects
  • Circularity
  • Technology
  • Awards
    • Top Products 2023
  • Living Lab
  • Archives
    • ConnectedWorld
    • Constructech
What's Hot

Tackling Waste in Agriculture And Food Supply Chains

May 29, 2023

Cyber World Attacks

May 29, 2023

Smart Home Healthcare: What’s Coming?

May 29, 2023
Get your Copy Today
Facebook Twitter Instagram
Facebook Twitter Instagram
Connected WorldConnected World
  • Sustainability
  • Projects
  • Circularity
  • Technology
  • Awards
    • Top Products 2023
  • Living Lab
  • Archives
    • ConnectedWorld
    • Constructech
Connected WorldConnected World
Home » Inflation and the Modern Company
Economy

Inflation and the Modern Company

Updated:April 27, 2022No Comments3 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp Email
Share
Facebook Twitter LinkedIn WhatsApp Pinterest Email

Inflation hits everyone but not equally. Those who depend on personal automobiles for work are complaining about the rise in gasoline prices eating away any salary benefits they may have gotten recently. Manufacturers worry about costs of parts for assembly and contractors about raw material costs. They all have reason to see inflation as a challenge.

Annual inflation rate in the U.S. accelerated to 7.9% in February of 2022, the highest since January of 1982. Energy remained the biggest contributor, with gasoline prices surging 38%. Government agencies are acting, too slowly some say, to rein in the escalation and the Federal Reserve, the national bank in effect, is taking steps to increase interest rates, a reaction to the pressure to bring down inflation.

Companies are also being tasked, by executives and shareholders, to act. According to Gartner, CFOs should move beyond short-term, reactive moves to counter inflation and identify opportunities to build long-term competitive advantages.

After making quick, cautious responses to immediately defend margins, CFOs are seeking further steps, so that their organizations can better weather persistent inflation and use the right strategies to drive competitive advantage. Key to this will be the concept of digital deflation, but beyond using technology to permanently reduce the cost of doing business, Gartner experts have identified three additional areas for CFOs to focus on as they shift from short-term inflation responses to longer-term strategies.

1. Align Costs to Points of Differentiation – CFOs have an opportunity to use this environment to both reintroduce and reconsider costs in a manner that addresses deeper issues in their organizations that may have been undermining profitability for years. CFOs can identify the right areas to scale costs by identifying true points of differentiation and then allocating disproportionate investment levels to them. Investments that directly contribute to customer loyalty or assets, such as patents or proprietary technologies that support competitive advantage, are examples that warrant elevated investments now.

2. Right size their Supply Chain to Minimize Disruptions – In the wake of initial inflation pressures, organizations sought to identify and mitigate individual supply chain disruptions. The next step for CFOs managing supply chain related inflation concerns over the long term is to right size their organization’s supply-chain surface area to limit the number of costly disruptions to the organization. Organizations that do this gain a competitive advantage because they experience fewer unfamiliar, high-impact disruptions per year compared to their peers.

3. Conduct Ongoing Pay Monitoring to Continuously Adapt to Market Conditions – While organizations have budgeted for increased salaries this year, much of that work was likely completed at the end of 2021, which may not reflect current and evolving realties as wage inflation persists. It’s critical for finance and HR to work together to monitor and dynamically adjust the organization’s pay practices and total rewards strategy throughout the year. CFOs should partner closely with the head of HR to make sure that any subsequent increases to people costs prioritize the business units and roles that generate the most value to the company, while continuing to differentiate offers from competitors.

Want to tweet about this article? Use hashtags #construction #sustainability #futureofwork

Constructech Construction Construction News Digital Transformation Economy Future of Work Gartner Legislation Manufacturing Projects Supply Chain Sustainability Technology
Share. Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp Email

Related Posts

Tackling Waste in Agriculture And Food Supply Chains

May 29, 2023

Cyber World Attacks

May 29, 2023

Smart Home Healthcare: What’s Coming?

May 29, 2023

Blowing Hot, Cold, and Green

May 29, 2023

Success Stories: High-Tech Hospitality

May 29, 2023

A Hire Calling: How You Can Attract Talent to AEC Industry

May 24, 2023
Add A Comment

Comments are closed.

Mending Manufacturing
Get Your Copy Today
ABOUT US

Connected World works to expand quality of life and influence a sustainable future through digital transformation, innovation, and create opportunities all around.

We’re accepting new partnerships and radio guests right now.

Email Us: info@connectedworld.com

4611 Hard Scrabble Road
Suite 109-276
Columbia, SC  29229

 

Our Picks
  • Tackling Waste in Agriculture And Food Supply Chains
  • Cyber World Attacks
  • Smart Home Healthcare: What’s Coming?
Specialty Publishing Media

Questions? Please contact us at info@connectedworld.com

Press Room

Privacy Policy

Media Kit

Facebook Twitter Instagram YouTube LinkedIn
© 2023 Connected World.

Type above and press Enter to search. Press Esc to cancel.

Go to mobile version