Boosting economic resilience during uncertain times
With today’s economic climate and global volatility, organizations of all sizes are focused on cash preservation, minimizing the impact of the rising cost of working capital, shifting customer buying patterns, strained workforces, supply chain bottlenecks, and the unforeseen.
More and more organizations are looking inward to navigate both short- and long-term disruption by reviewing their current operating models or reinvesting in their current people, processes, and technologies. Optimization across these areas boosts resiliency by empowering organizations to streamline business processes, automate manual tasks, and realign people. Ultimately, these quick-turn successes give organizations the ability to be better prepared for challenges such as obtaining working capital, inefficient workforce deployment, and inadequate technologies. These quick turn successes also help create agility within the organization to address rapid changes in business requirements driven by economic uncertainty.
Volatility can create disruption in the work environment. Organizations should respond by modifying and consolidating their workplace models to redefine current roles and responsibilities across all business functions to adjust for changing needs. Additional solutions can include outsourcing or offshoring tasks or functions.
The ability to quickly reassign talent to where they are most needed is critical to enhancing operational efficiency and performance. Where possible, on-site employees should be aligned with mission-critical areas.
Before making changes, assess for gaps or mismatches in current capabilities such as technology literacy, process expertise, employee training, and potential local and state compliance issues (i.e. cross border regulations). Assessing the overlap and redundancies in roles and responsibilities within your organization is critical to cost-effective future operations, and the ability to recruit and retain top talent.
From a people perspective, it’s critical that the finance function has the agility and flexibility to support:
- Your organizational structure lines of reporting
- Skills, roles, and responsibilities
- Activities for each process area that contribute to the most impactful results (and provide support for those activities)
Done right, reallocation of personnel can contribute to enhanced employee morale, productivity, and promote retention initiatives.
Organizations have been shifting toward a lean operating model for years, one that streamlines processes for efficiency and a sustainable future. Economic turbulence will likely further spur adoption of the lean model, thanks to its ability to simplify business processes. Another advantage of the lean model is to help optimize workforce demand, an essential capability in today’s tight labor market.
Automation of standard business and operational processes is one of the most powerful enablers of a lean, agile workforce. Robotic process automation (RPA), for example, helps improve workforce productivity by minimizing manual, labor-intensive activities that increase human capital costs. It can also help reduce dependence on key personnel, improve decision-making, and better support critical business processes. RPA plays an important role in customer and employee engagement through time-saving technologies that help streamline the user experience and processes.
Two process improvements that are essential to weathering economic downturns are the ability to address supply chain disruptions and an appropriate service delivery model. Supply chain resilience can be fortified through intelligent sourcing and procurement processes. For a more efficient service delivery model, organizations should evaluate the merits of a shared services center, outsourcing, and center of excellence concepts.
Accurate and timely financial performance insights can serve as beacons for successful navigation of choppy economic waters.
The key performance indicators (KPIs) used to measure performance and inform decisions will differ by company and industry. Consequently, businesses often find it difficult to identify the most relevant KPIs to gauge current and future conditions. Priorities for many businesses include metrics on cash forecasting, procurement, supply chain disruptions, and internal and external reporting. Combined, KPIs, data analytics, and reporting can help businesses make fact-based decisions on managing rapid changes in a volatile economy.
Real-time reporting capabilities can improve the accuracy and precision of managing costs and expenses. Reporting also helps enhance budgeting and planning by delivering performance insights that enable deft readjustment of expenditures, forecasts, and the workforce as conditions evolve.
Beyond reporting and KPIs, organizations should revisit inefficient and misaligned processes to help manage policy compliance, internal controls, performance, and generation of reports.
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