CEOs Say Revenue Growth Is More Important Than Cost-Cutting - InformationWeek
Business & Finance
06:22 PM

CEOs Say Revenue Growth Is More Important Than Cost-Cutting

A survey by IBM Business Consulting Services says 83% of CEOs polled list revenue growth as their top priority.

CEOs, whether they're based in New York, Tokyo, Frankfurt, or Rio, share similar agendas for their companies' near-term future: Growing revenue has a higher priority than cutting costs.

As the global economy expands, 83% of CEOs from major global companies identified revenue growth as their top goal over the next three years, according to the Global CEO Study 2004 released Monday by IBM Business Consulting Services. Cutting costs remains a top priority of more than six in 10 CEOs surveyed. No other areas came close. "Costs are almost totally controlled, so we should focus on revenue growth," one CEO told interviewers, many of whom are partners in IBM's consulting unit.

There were few differences between the responses of CEOs based on geography, though the gap between growing revenue and cutting costs was smaller among European and the Japanese chiefs than among CEOs from the Americas and the non-Japanese Asia-Pacific region. Eric Pelander, leader of IBM's strategy and change services practice, suggests that American and Asian-Pacific nations are ahead of their counterparts in Europe and Asia in employing technology to trim costs.

One incongruity of the study, at least on the surface, relates to the role of the customer. Sixty percent of the CEOs who see rapid response as an important factor say capturing and employing customer information to make rapid decisions is important. Yet only 40% say implementing and leveraging customer-relationship-management processes and applications are actions they'll take to rapidly respond to customers. Pelander says the difference could be CEOs' uneasiness about the effectiveness of specific CRM system modules and marketing schemes that might not have worked as promised.

The study suggests that CEOs are comfortable with technologies. About one-quarter cited technological uncertainty as the technology factor that would have the great impact on their business; but seven of 10 cited adopting new technologies as the greatest tech factor to have a big influence on their organizations.

Other findings of the survey of 456 CEOs, including about 70 from U.S. businesses, that was conducted in the fall, include:

• Overwhelmingly, by more than 80%, the CEOs identify market forces as the biggest external force that would have an impact on their companies, followed by people skills and macroeconomic factors, both at about 40%. Most CEOs don't see technology as a major external force, with only about one-third citing technology as among the top three forces that will have a major impact on their companies. These findings suggest the pervasiveness of IT within big companies; technology is ingrained in the business world.

• Eight of 10 CEOs see increased competition as the greatest market factor to have a big impact on their companies, with about half identifying changing market dynamics.

• About two-thirds of the CEOs say new products and services represent the greatest opportunity to grow revenue, with nearly half identifying new markets as a place to get extra bucks.

• More than 30% of the CEOs cite economic uncertainty, workplace issues, and regulations as the most significant external barriers their companies confront. The most significant internal barriers: Half the respondents point to limited capabilities and leadership resources to manage change-related projects.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
2017 State of IT Report
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Register for InformationWeek Newsletters
White Papers
Current Issue
Top IT Trends for 2018
As we enter a new year of technology planning, find out about the hot technologies organizations are using to advance their businesses and where the experts say IT is heading.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll