Inflation Readiness Questions

CEOs should ask the following 20 questions to assess whether their organization is inflation ready in the three critical areas of pricing, procurement, and finance.

Pricing

• Do we have dedicated resources for pricing intelligence?
• Do we employ state-of-the-art pricing analytics?
• Do we have short- and long-term guidelines for price setting?
• Is inflation factored in to pricing decisions?
• Do we have real-time information on competitors’ prices?
• Do we continuously monitor customers’ price elasticity?
• Does pricing reflect the costs of unused capacity?
• Do we know where our price leaks are?

Procurement

• Do we use scenario planning for key input factors?
• Do we know which developments are most likely to affect the availability and prices of key inputs?
• Do we have tools in place to monitor supplier markets?
• Do the procurement and sales organizations regularly exchange information?
• Do we continuously monitor the cost structures of potential suppliers?
• Are we aware of the costs of unused capacity?

Finance

• Does our accounting system capture the financial impact of inflation?
• Are there guidelines for incorporating the effect of inflation in business planning?
• Can we simulate the impact of different inflation scenarios on our business plans?
• Is liquidity reporting part of our regular financial-performance reviews?
• Do we have the mechanisms in place to adapt our business plans in real time as major financial and economic assumptions change?
• Do we use inflation-adjusted metrics for management reporting?

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