People are using technology to make their own decisions in the face of Brexit chaos, says insightsoftware’s Richard Sampson – and they are no longer looking for guidance from the House of Commons
Drama, deadlines, and debilitating disputes make up an average day in Westminster these days. Brexit leaves the UK parliament hamstrung, bringing about a level of uncertainty not witnessed—arguably—since the Second World War.
As a result, businesses are having to find their own way through, using technology to help them make certain decisions instead, without guidance from the House of Commons.
How it looks now
At the time of writing, the UK has agreed to a Brexit extension until 31 October, with a review of progress scheduled in June. Theresa May and the UK government are still hoping cross-party talks will come to some sort of agreement in May to ensure the UK does not participate in EU elections. However, we have yet to hear any news on that front.
While everyone remains in the dark as to the future of Brexit and what it will look like, the extension does mean businesses have a little bit more time to plan for multiple Brexit scenarios.
Technology takes on a whole new role
The modern-day finance team is adjusting to an “always on” world, which demands answers NOW. It means introducing a level of agility to the team so it is able to react to macro-economic events with ease, generating the right analysis and sound business decisions to implement in more uncertain times. Even if businesses have one month or six to plan for Brexit, businesses can get to this stage promptly. Investing in, for example, ERP reporting technology means a company can predict specific Brexit outcomes without delay.
With Brexit, there are many variables businesses are currently considering and analysing to work out what to do next. Current strategic moves being looked at include reviewing suppliers, updating supply chains, adjusting stock piling decisions, re-evaluating margins as a result of changes to potential EU preferential rates, and reviewing possible changes to credit ratings. Interestingly, stock piling is causing an increase in the IHS Markit’s Purchasing Managers Index, which rose to 55.1 in March, the highest since February 2018.
Therefore, it is clear UK companies are already making decisions in an attempt to insure themselves against any economic shocks. Based on conversations with our customers, predictive calculations chiefly revolve around inventory planning, currency movements, and any potential changes to credit ratings. Overall, this amounts to calculating 50-100 predictive what-if scenarios a week using ERP reporting technology, and that changes daily depending on activity in the House of Commons.
ut what is the right data to pull to make the right decisions? There is no denying though that shareholders, regulators, and other business stakeholders want a Brexit strategy based on the right decisions, especially if the business in question has a complicated supply chain involving the EU. So, it does not come as a surprise that these expectations apply increased pressure on finance teams to deliver the right analysis in the right way.
How to unlock the potential in data
It is a truth universally acknowledged that any analysis is only as good as the data you pull from each system of record, meaning whichever system of record is involved, a review of the data they hold is a decent first step.
Secondly, the amount of data that needs analysing across various systems of record can be huge when planning for, say, a no-deal Brexit. However, time-intensive data extraction is not possible anymore; manually compiled static Excel spreadsheets that lead to human errors make certain data untrustworthy for making reliable decisions—so avoid any manual operations as much as possible.
Also, another word of caution: If a finance team wanted to implement a traditional reporting system to tackle the data challenge, it would be fraught with problems too. They would need to hire programmers and allow for huge implementation times to get everything working. As a result, the only way for a finance team to remain agile during periods of uncertainty is to create calculations and predictions from live data with automated, flexible ERP reporting to satisfy stakeholders, customers, and shareholders quickly.
A new look for finance
With the creation of Brexit-led predictive reports a “must,” the finance team is heavily involved in how their company will operate post-Brexit. ERP reporting systems are able to elevate the finance department to a department of strategic analysis, rather than the “folks who do the numbers.” To prevent any wrong decisions at such a critical time, review the data you have in each system of record, as well as the technology in place to help analyse live data. That way, a finance team can be agile during ongoing periods of uncertainty.
Let’s face it: If a business builds agility into everything it does, the finance team is able to adapt to anything the world throws at them—and fast.
This article originally appeared in AccountancyAge on April 25, 2019.