By Nicky Tozer, SVP, EMEA, Oracle NetSuite
We have learned over the past several years that ‘uncertainty’ has become a constant in the economic and business world, and 2022 was no exception – to the point where ‘permacrisis’ was named the UK’s word of the year. These years have shown the importance of remaining flexible and adapt to any situation, however severe, and this requirement for agility appears destined to be a major theme in 2023.
Businesses will continue to face challenges from supply chain problems, geo-political unrest, and cost-of-living crises that have moulded 2022. With increasing emphasis on a prolonged recession, UK businesses are now placing a greater focus on doing more with less. When speaking with customers, prospects, and partners, 2023 is still hailed as a year of opportunity. There is a strong focus on leveraging profit as a fuel for expansion, finding methods to stay flexible, and being more efficient than ever despite the obstacles that firms will face in the coming year. It’s a fine line to walk, but one that can be managed with good preparation and a sharp focus on financial data and the bottom line.
So what strategies can businesses seize for growth in 2023? Here are the main areas that businesses should concentrate on in the coming year, according to our consumer insights and conversations:
Ensuring flexibility in planning and strategy
As uncertainty continues into 2023, businesses should focus on making their digital capabilities more robust to protect against risk. This means finding ways to respond rapidly to evolving challenges and plan for different scenarios to ensure business continuity.
For instance, when considering their supply chain, businesses have been forced to react quickly to continual product shortages, delivery strikes, and port delays, that show no signs of slowing down. This is just one example where businesses have had to make rapid moves to stay afloat, moving from just-in-time towards a ‘more stock, less deliveries’ model, trying to balance out associated costs of storage and management.
These kinds of continual changes help to absorb the shock of new scenarios, but it can be difficult for businesses to pinpoint areas that need their attention. In 2023, visibility of real-time, reliable data will be vital to enable proactive action and adapt strategies at speed. Bringing together data from all business functions such as finance, inventory, and supply chain to create a single view will be vital, maximising return on investment and sparking investment in further growth.
Finance automation simplifies complex processes
The most difficult task facing CFOs in 2023 is the hiring and retaining of staff. The battle to attract top talent is fierce, and as finance leaders keep their teams lean in recessional times, they need to get creative.
In 2023, automation will be a vital investment for finance teams, not only to do more with less people, but to give professionals more time for value-add projects. Manual tasks such as month-end close usually require finance teams to aggregate and assess large quantities of disparate data. This can be a time-consuming task prone to error, with just one incorrect cell having the potential to cost businesses thousands of pounds and wipe out their hard-earned profit. Centralising data and automating financial processes mitigates risk, makes data more accurate, and allows finance teams to focus on analysis and respond to market changes.
Finance professionals do not want to spend their time checking and consolidating spreadsheets – they want to add value and have boardroom-level input. Automation in 2023 will play a pivotal role in retention and making finance staff feel valued.
Reduce supplier and currency risks with auto-pricing
As markets remain in flux going into 2023, being able to adapt rapidly to shifting prices will be vital. Budgets and profits can be thrown into disarray with any small change to supplier pricing, and it can be hard to spot the difference until it is too late. With increased international growth and sales abroad, the complexity increases further with changing VAT and customs rules that make it difficult to keep pace.
In 2023, auto-pricing will enable businesses to remain agile and budget more effectively. This technology allows companies to respond to fluctuating supplier prices and maintain accurate cash flow forecasts – able to centrally manage pricing, ensure consistency across all channels, and amend product prices in line with margins. Auto-pricing effectively puts the brakes on for businesses if a product or component is getting more expensive or gives the green light to buy at the right price. A key advantage is that these changes happen in real time, not weeks down the line, saving vital funds.
When looking at international trade, this technology allows businesses to manage pricing centrally, automatically updating any country-specific tax compliance or sales rules to ensure that there are no unexpected penalties or losses of revenue. Currency specific pricing and percentage discounts give complete control, allowing businesses to assign price levels to different channels and customers.
Customers, employees, and investors prefer to work with companies that ‘do good’
ESG reporting will continue to gain prominence in 2023. Customer demands for transparency, and younger generations holding employers to higher standards than their predecessors has given ESG a pivotal role in recruitment, retention, and brand loyalty. Almost half of investors are even willing to divest from companies that are not taking sufficient action on ESG issues, and with business owners increasingly reliant on investment, they cannot afford to neglect this reporting.
Better visibility on commercial and human resources data means better accountability and faster compliance. Creating and maintaining a robust ESG strategy hinges on a company’s quality and breadth of data. Cloud-based solutions will be vital to aggregate information from all parts of the business, shape realistic targets and monitor progress that will satisfy customers, employees, and investors alike.
Meaningful progress towards ESG goals has been proven to influence investment opportunities, increase consumer spend and increase workforce productivity – vital as we move into a period of even greater financial uncertainty in 2023.