How to improve your bottom line?in times of economic downturns?

For companies, economic downturns can be challenging, having to balance costs with lower sales as consumers (individuals, households, and business alike) are tightening their budgets and reducing their spending, leading to downward pressure on prices, an increase in the duration of sales cycles, and more intense competition, amongst other adversities.?

However, with the right ideas and strategies in place, companies can not only keep their businesses afloat but even thrive. Being agile, resourceful, and staying proactive is going to be key to successfully handle the uncertainties of the new economic reality and for that, companies must stay on top of their operations, optimize their processes, and make informed decisions to minimize risks.???

Adopting new technologies is often touted as an efficient and sensible way to help companies achieve these ideals.??

Yet, while this sounds great in theory, it’s not uncommon for companies to want to play it safe during times of an economic downturn, and thus, many shun away from making any big decisions around changing the way they operate, and rather focus on reducing any big and obvious operating costs to survive.???

But like the saying goes, the devil is in the details.??

Looking beyond any obvious costs is difficult as they are often “hidden away” in inefficiencies that companies simply accept as their reality. This is an opportunity costs that most companies are just sitting on. This makes sense when the economy is doing great, as companies have an incentive to drive their sales as much as they can. In this scenario, diverting resources to invest in technology can mean leaving money on the table. But when the economy slows down, and with it the sales that a company can make, capitalizing on that opportunity cost, i.e., on optimizing costs on a more granular level, starts making sense, as it’s a way to improve the bottom line and stay competitive.??

In other words, investing in adopting new technologies during a downturn is far from counterintuitive, it’s a unique opportunity to tackle the inefficiencies present in your business where and when it’s most needed, to weather the downturn and thrive afterward.??

?For example, analytics and business intelligence (BI) tools can help companies understand how changing market conditions is affecting different areas of their business and identify areas where there is potential for operational improvements to make timely strategic decisions. Overspending, process bottlenecks, unnecessary material purchases, machine downtimes, etc. are all examples of ‘waste’ that BI can help identify for companies to tackle.?

For instance, a healthcare provider could use analytics to identify opportunities for cost savings in their procurement process. By analysing data on their purchasing patterns, they could identify areas where they are overspending or buying unnecessary supplies. They could then adjust their procurement process to reduce their costs without compromising on patient care.?

One major concern for companies during an economic downturn are labour costs, and while layoffs might be the first idea that comes to mind to reduce costs, they are not just harmful to employees, they’re costly for companies too; they lose expertise and must reinvest in hiring and training which is expensive. Luckily, there are alternatives to layoffs to reduce labour costs: reducing working hours, furloughs and reducing bonuses are examples that come to mind, and automation.??

?Automation is usually associated to the idea of replacing a person by a machine or software, and while there certainly are cases where this happens, most of the time the benefits of automation lie not in replacing people, but rather in freeing them from routine and repetitive tasks and reducing the need for manual labour. Not only does this mean that employees can dedicate their skill to more valuable tasks like innovating, collaborating, creating, and interacting with customers[2] , but for the business as a whole automation brings about a host of efficiencies: reduced number of errors, faster operations, consistency and accuracy, improved quality, improved safety, and more.?

?Robotic Process Automation (RPA) and Machine Learning (ML) are both technologies that can help automate a company’s operation. As the name implies, the former focuses on automating processes, or rather workflows, like logging into applications and systems, moving files and folders, extracting, copying, and inserting data, filling in forms, and completing routine analyses and reports.[2] Also known as software robots, RPA is a great tool to help companies reduce waste, increase their productivity, and do more with less.?

?Machine Learning on the other hand can take on more complex automation tasks like fraud detection, extracting data from documents, optimizing ad targeting, identifying defects in products, and much more.?

?Beyond automation, Machine Learning offers a whole host of additional possibilities for companies: forecast demand, optimize their supply chain, and make better pricing decisions to boost their revenue.?

?For example, a retail store could use machine learning to forecast demand for specific products. By analyzing past sales data, they could predict which items will be popular during different seasons or events. They could then adjust their inventory levels accordingly, ensuring that they have enough stock to meet demand without overstocking and tying up their capital. This would help them reduce waste, optimize their labor costs, and increase their revenue.?

?There is no shortage of examples of how technology can help companies become more efficient. The key is realizing when it’s the right time to invest in them, and as counterintuitive as it might first sound, an economic downturn is a cost-effective time to do so, and none has a more wide-reaching impact across a business than data solutions.?

?As an expert partner for digital transformations, we help our customers harness and capitalize on new data technologies. From optimizing and automating operations to modernizing core technologies we help organizations reimagine how they can operate in the future.??

?We listen closely to understand your special needs and advise and deliver solutions and services tailored to your individual requirements. Our skills and approach ensure that we minimize the risk for our customers and increase the chances of gaining value at every step of your journey.?

?Data solutions are certainly not reserved for a chosen few and not hard at all to incorporate if we set out with a solid foundation. This is where we should start. Let’s chat about your needs and find the solutions that meet your requirements and create added value.??

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