Insulating Your Businesses to Be Recession-Ready
Here’s how businesses can make their operations more efficient amid recession.
The right combination of B2B apps and enterprise software can help your company build momentum in the midst of budget-tightening inflation. Sean Sollitto, the founder of Relish, says investing in procurement technology makes businesses more resilient as it is instrumental to the everyday operations of a modern enterprise and can help reduce operating costs.
A recession is coming.
You don’t have to look at the headlines to see that the economy is in a fluctuating state of turmoil. One trip to the grocery store, where the cost of milk and household staples have risen dramatically in months, is signal enough that inflation is taking its toll. Groceries and gas now cost more than they did last year.
This overall scorching inflation rate is now trickling into every corner of life, impacting household and corporate budgets alike. Higher interest rates meant to curb inflation also curb consumer spending, which makes borrowing money and investing more costly for companies. Increasingly high prices also leave everyone with less discretionary funds, leading to waning demand and inventory shelves stocked with products purchased at inflated prices that are too steep to sell.
As these challenges progress, company leaders will be forced to do more with less staff and less capital to stay afloat, and their responses will likely fall into one of two camps: Some will hunker down and slash costs, while others will radically invest in the future.
Neither of these choices is easy and both have real-world implications for employees and vendors. In foreshadowing a fiscal nightmare, survival means finding the most economical path to efficiency while readying for what comes next. That means companies must also protect team morale, innovation, and culture through data-backed decisions. Generating this cost-efficient momentum requires rethinking how resources are prioritized and leveraged.
Playing Defense through Automation
When everything is more expensive and cash flow feels strained, making deep budget cuts can feel instinctual, but a report by Harvard Business Review found that companies that reduced costs quickly through layoffs had a far more difficult recovery. These companies had a meager 11% probability of seeing breakaway performance following a downturn.
On the other hand, companies that focused on operational efficiency fared far better. That’s not to say that budget cuts aren’t necessary—a wise defensive plan in a recession-era includes healthy cost-cutting measures—but leaning into operational optimization allows for frugality that doesn’t also create hard-to-fill employee vacancies or curtail innovation.
Managing the array of departments required to keep business running can burn employee bandwidth and capital, but achieving an ideal balance between budget tightening and investment in the right procurement software and supply chain systems can be an integral step in making operations not only more efficient but more sustainable in the long run.
Utilizing the power of AI and machine learning to improve supply chain systems, for example, can help leaders keep a constant eye on fluctuating costs of materials and shipping, improve their cash flow and free up employee work hours. That same technology can also transform quality checks into an automated process that prevents recalls while utilizing the predictive analysis to reduce risk and disruptions.
The right software has the power to free up employee attention, redirect resources to maximize profitability, and clear the path for innovation.
See More: Is Intelligent Automation an Alternative to RPA? Experts Weigh In
However, most enterprise software solutions are not even in a perfect world. Cloud software is often designed as a one-size-fits-all mechanism, while companies themselves are like fingerprints, each with a different set of unique requirements.
A quick fix sounds appealing, but it’s important to remember that a full enterprise application overhaul or platform switch may not be the best solution. Implementing new software only addresses 80% of a company’s needs, leaving a critical 20% gap.
These functionality gaps can expose companies, but some complementary apps and platforms can bridge the distance and provide maximum return on enterprise application investments.
Recent case studies by a low-investment B2B app solutions provider illustrated the unrealized benefits many companies leave on the table when they fail to empower these types of platforms in their infrastructure.
For example, one global retailer, in search of a way to expedite their supplier onboarding process without compromising the quality of their critical global supplier data, integrated a B2B app into their existing platform. The result was a savings of 30 hours of manual effort each month in TIN validations alone.
Another company specializing in US-based petroleum distribution leveraged a B2B app to reduce the number of manual processes required to manage third-party supplier information. Through app automation, the company not only freed up employees to become more strategic in their roles but also reduced user error to zero, establishing a clean audit trail.
B2B apps can offer ways to improve or even tailor enterprise applications in a quick, cost-effective way that does not require a full overhaul of the company’s pre-existing software and applications.
Building Momentum During a Recession
Combining the power of enterprise software with a B2B platform or app can streamline systems and reduce manual, time-consuming tasks, ultimately increasing efficiency. This doesn’t mean handing over the operations to artificial intelligence and automation but rather designing a human and artificial intelligence interface. Utilizing a B2B app that incorporates automation to replace rote or unproductive tasks while freeing up human employees to focus on innovation, strategic initiatives and interpersonal responsibilities lead to a more efficient operational workflow.
More than half of executives are on the leading edge of this advantage, with 54% saying that AI solutions have already increased productivity in their businesses. These leaders are automating processes like tax and finance, analyzing models of individual customer behavior, and using historical data to identify trends that strengthen the decisions of their human employees.
Integrating AI and automation in the workplace is an efficiency booster, but more than that, it’s now a crucial component for any company that wants to remain competitive long-term. Company leaders must pause to identify their specific organization’s unique challenges and tailor a B2B app and software solution to match those needs.
On the other side of this economic downturn, the companies that chose to shrink by slashing employee numbers to survive will be forced to compete with organizations that chose to grow through the right combination of budget-friendly, AI-powered software and B2B platforms. Which strategy will your company choose?
How do you think businesses can make their operations more efficient amid a recession? Share your thoughts with us on Facebook, Twitter, and LinkedIn.
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