If 2020 has been anything for the business world, it has been the Year of the Pivot. Countless organisations have been forced to rethink their entire business strategy due to the pandemic, with many forced to make rapid pivots just to survive.
The “new normal” requires a new set of rules. What applied a year ago has been thrown out of the window. Here are the three new rules for business survival:
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Use real-time data for dynamic forecasting
Traditional forecasting no longer applies in such a changed and volatile economy. The disruption of the past few months has made previous predictions obsolete. Markets have changed permanently: anything you recorded in a spreadsheet twelve months ago is almost irrelevant.
Instead, with business expectations and requirements constantly shifting, along with unexpected operational challenges, having real-time visibility to generate real-time insights is crucial. You need to keep your finger on the pulse when it comes to customer demand. One way to achieve this is with a cloud-enabled ERP system so you can see business data as it happens and make more timely and relevant business decisions based on what you’re actually seeing in the present time. This information can be used to continually adjust and adapt your business plan and prepare contingencies for unsettled times.
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Have timely, accurate reporting
Smart use of data can help you manage demand, improve efficiencies, generate more accurate reporting and help provide a better customer experience. It enables you to be much more responsive to subtle changes or significant shifts in the market.
The biggest thing we’ve seen since COVID is how important it is for businesses to have access to accurate and timely reporting – in real-time. No longer can businesses afford to wait weeks to get an Excel spreadsheet that shows their profit and loss, inventory levels, cost of sale and so on. They need this data now. Every day was changing during COVID and so was the way customers were buying. Being able to access timely reports across your operations is the biggest thing that has helped businesses survive, by helping inform critical business decisions. Those that don’t have access to timely data on the go are left behind to pick up the pieces.
Businesses need to be more agile than ever before. What’s selling and what’s not moving? What do your projected sales look like? Is your inventory carrying the right stock, and/or do you need to change how you’re getting goods from end-to-end? If you’re a manufacturer or supplier, has your supply chain been interrupted, and if so, do you need to switch to local suppliers if overseas shipping is affected? Are any components essential to your production in shortage? All these questions can instantly be answered if you have access to real-time data.
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Maintain flexibility in your operating and selling model
Cashflow is king, and in these uncertain times, cash flow needs to be proactively managed. Keeping a close eye on cash flow also comes down to understanding where you’re making profit and where you’re not. Many potentially successful businesses with unique products and services don’t survive because they don’t keep a close enough eye on finances. But you can use data to measure and compare where you are and keep close tabs on cashflow.
Having an ERP system makes it much easier to remain flexible. It can let you flexibly add new revenue streams and market to your customers through different channels, such as selling direct to customers if you weren’t before, or selling through partnerships. It also delivers time and money-saving efficiencies. Admin is reduced so your team can focus on work that generates more business value, such as marketing and customer experience. A smarter and more efficient supply chain also results in fewer errors, less delay and less wastage. All of which delivers a competitive advantage.
For all businesses, whether things are difficult or not, it’s always an idea to look at real-time working capital/invoice financing options to ensure a smooth path. Having clear visibility into your business and being able to generate reports will make it easier to approach banks and other lenders.
The overall message is to use data to be agile. With COVID, there was initially less emphasis on efficiency and more on resilience. But for ongoing survival, both are critical. From remote working to online selling, there are multiple examples of how agile businesses have taken advantage of opportunities not only to navigate a time of change, but also to grow. With the right tools and the right approach, your business could be among them.
By Jonathan Attia, Managing Director, Wiise
This article was first published by Kochie’s Business Builders