David Poole, CEO
So, how’s the new decade going so far? Not as planned, I don’t imagine – but that is sort of the point. Without wanting to immediately mention a certain pandemic, one of the messages I want to hammer home is that things rarely ever go according to plan – and a good business strategy is one that accounts for that inevitability. A famously wry phrase comes to mind: “the best-laid plans of mice and men often go awry.”
Pandemic aside, Brexit is still up in the air, a potential recession is dawning, climate crises loom, and in the financial industry, regulatory shifts such as IR35 and the transition away from LIBOR threaten to wreak havoc on contracts and risk management. The difficult act of leading and scaling a successful business over the coming decade means staying one step ahead, not only of the competition, but of the next major catastrophe too.
Business leaders may be forgiven this time around for being unprepared. The same cannot be said, however, for a second wave of the pandemic. Or for the effects of climate crises on supply chains, or for shifts in outsourcing patterns, consumer demands and workforce requirements. These are all elements that should now be factoring into executives’ long-term visions.
The key is to build the capacity to adapt swiftly. Resilience must replace raw efficiency as the modus operandi of modern businesses. Much like the economy itself, companies can no longer keep pouring all profits into further growth, and cannot continue to work with zero-margin-for-error supply chains. Contingency planning is essential. When the roadmap drastically changes, how resilient and adaptable is your business? How do you transition from short-term survival tactics to the long-term future-proofing of your organisation?
Overcoming ‘analysis paralysis’
Evidence suggests that the majority of executives are not sufficiently championing innovation. 65 percent of the senior executives surveyed by McKinsey were only “somewhat,” “a little,” or “not at all” confident about the decisions they made in this area. Another Deloitte survey reveals that less than half of executives are confident in their own ability to lead their organisation in the digital economy.
The businesses they are leading share this lack of confidence: a report from MIT Sloan found that less than 10% of respondents believe their organizations have leaders with the right skills to thrive in the digital economy.
Corporate leadership must be redefined to lay the foundation for a future-ready working culture. Executives need to set an example, because studies show that when they do, sustained innovation follows. McKinsey’s sample of 600 managers and professionals suggested that the top two motivators of behavior to promote innovation are strong leaders who encourage it and top executives who drive it.
Faced with a plethora of different technologies and possible strategic paths, however, executives could be forgiven for feeling paralysed by choice. Intelligent automation, Robotic Process Automation (RPA), Natural Language Processing (NLP), Machine Learning (ML), and Optical Character Recognition (OCR) are just some of those on offer, and each comes with a slew of media hype. Do senior decision-makers understand these technologies and the opportunities and risks that they present?
At Emergence, our mission is to help business leaders gain the clarity they need, to build strategies that reconcile short-term gains with long-term ambitions, and to build the resilience required to stay adaptable to challenges presented along the way.
Embracing technology should be a huge part of any business’ plans. This doesn’t mean welcoming new tools hurriedly, uncritically and with open arms; it means diagnosing your pain points and defining a technological vision that will benefit your company and its stakeholders in profound ways. To quote IMD innovation professor Bill Fischer, true innovation comes from mindset, not hardware.
FIVE REASONS WHY YOUR BUSINESS’ PROCUREMENT TEAM SHOULD BE USING A CONTRACT MANAGEMENT SYSTEM
By Daniel Ball, business development director at Wax Digital
Even in today’s digital-first environment some businesses are still storing documents, such as contracts, in filing cabinets making it labour intensive to retrieve, manage and even identify important paperwork. In fact, it is calculated that poor contract management practices are costing companies an average of nine percent of their annual revenues.
Moving to a contract management system online can speed up the retrieval process and help decrease the amount of time and resources required to manage contracts. Using a CMS companies can create an online database to centralise information and store documents. Not only does this help ensure contracts are well managed and kept up-to-date, but it can also help businesses save up to 20 percent of overall costs per year.
From legal departments overseeing regulation compliance to finance teams ensuring payment deadlines are met, contract management technology benefits many areas of an organisation. So, how can a good CMS help your procurement team?
How will a good CMS help your procurement team?
The number of suppliers your procurement team must oversee varies depending on the size of your business. It’s not uncommon for large enterprises to be working with thousands of suppliers at one time. A CMS will use automation to record, manage and streamline data, providing procurement teams with important contract details including time and location information, as well as real time alerts such as contract breaches.
Here are five reasons why your business should be using an online contract management platform:
- Increased spend visibility
Using a CMS can give procurement professionals full visibility of suppliers, including the company name and location of where a product is coming from and in what quantity. This transparency will also help contribute to the risk management strategy of your business as it enables you to spot vendors who may be prone to environmental, economic and political uncertainty. In the current environment, for example, suppliers’ may have decreased or ceased production due to COVID-19 or could have been heavily impacted by the negative price of oil, making visibility increasingly important for businesses.
- Eliminates maverick spend
Centralising and streamlining contract documents will ensure that buyers can instantly access up-to-date information to see if a contract already exists. This helps buyers avoid simple and common mistakes that often occur when using manual filing systems, such as onboarding new vendors when existing agreements are in place with another supplier.
- Keeps track of contract renewals
It’s easy to forget about contract renewals or sign up for another term without ending an existing agreement, especially when using a traditional filing system. Businesses using an online CMS can set up renewal alerts in advance, allowing buyers sufficient time to source new vendors or negotiate better prices.
- Improves spend management
A centralised database means that all negotiated prices, contract conditions and other important transactions can be accessed in one place, making it easier to analyse spend. A CMS can help identify discrepancies, find where contract violations have occurred and deal with any associated problems.
- Adhering to regulatory and legislative compliance
It’s important to ensure that all suppliers are meeting the terms of their contracts. A CMS will automatically audit supplier information, meaning that any failures are immediately raised to procurement teams. The platform will also provide notifications if any new data is required or updates need to be made, avoiding potential legal issues.
It’s clear that using an online CMS will benefit your business and procurement teams by increasing spend visibility, enabling access to up to date information, ensuring contracts are closely monitored while contributing to the reduction of unnecessary spend. So, now’s the time to stop relying on those dusty old filing cabinets and start using a CMS.
PROTECTING YOURSELF AGAINST A RECESSION
James Turner, Director at Turner Little
The coronavirus outbreak has spread to businesses, leaving many around the world counting costs. Notoriously, known as the Great Lockdown, it’s been affecting the world economy since early this year. The predicted recession is considered to be the steepest economic downturn since the Great Depression.
So, what does that mean for you? James Turner, Director at company formation specialists, Turner Little, suggests “While there’s no fool proof way to ‘recession-proof’ your finances, establishing a solid base now will put you in a better position to weather the storm.”
“Whilst the future of the global economic landscape is simply too complex to predict, it’s not hard to spot imbalances that have built up, as central banks and governments around the world talk about introducing further fiscal stimulus and monetary expansion, the consequences could be significant,” adds James.
A good wealth management agent will recommend starting by saving a substantial cash emergency fund in a high-yield savings account, understanding your spending habits and where you could cut back if you needed to, and establishing your long-term investing strategy now, so you can stick to it.
If you were to solely invest based on the inevitability of a recession, you are likely to miss returns that are immediately available. If you truly want to recession-proof your assets, the best thing to do is develop a long-term strategy and invest wisely.
Diversification still matters
It’s dangerous to pile all your investments into a single sector, including consumer staples. Diversification is especially important during a recession when particular companies and industries can get hammered. Creating a diversified portfolio of assets blended across asset classes—such as fixed income and commodities, in addition to equities, sectors, geographies and strategies—can also act as a check on portfolio losses.
Build a reserve
To keep your money protected before, during and after a recession, it’s recommended to have an income generation conversation with a financial advisor. This will cover a lot of different topics, but one of the most important is the emergency fund. You’ve likely heard many times that it’s good to have between three and six months’ worth of living expenses set aside in the event of a job loss, health crisis, or other unforeseen circumstance.
Protect your assets
If you’re interested in talking about protecting your assets and your investment portfolio, do get in touch. We specialise in creating bespoke solutions for individuals and businesses of all sizes. The knowledge and expertise of our specialists will be able to assist with any enquires, no matter how complex.
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