Business
Preparing for turbulence: building business resilience for 2023 and beyond
Global Banking and Finance Review
Company
By Edgar Randall, Managing Director – Dun & Bradstreet UK&I
No matter where you are in the world right now, economies are struggling. Geopolitical tensions, rising inflation and interest rates, and many other external factors, continue to impact businesses across the globe.
The UK, for instance, just reached the country’s highest interest rates since the 2008 financial crisis. And this news follows on from higher-than-expected inflation data which continues to remind us of the challenges businesses are facing today.
But these disruptions aren’t happening in isolation. We’re seeing a ripple effect on multiple industries and individuals, with those less prepared to weather such challenges taking the biggest hit.
It’s clear that prioritising the development of resilient strategies is vital in the face of volatility and uncertainty. But what exactly do leaders need to prepare for? And what should be prioritised to make resilient operations a reality?
There are many concerns for business leaders today – many of which are having simultaneous and substantial impacts on international and local business environments. From rising inflation to the increased cost of doing business, supply chain disruptions, higher interest rates, continued monetary policy tightening, the sustained impact of the pandemic and Brexit, as well as geopolitical instability.
Companies are facing a rocky environment, where rising costs are meeting a decline in customer demand as inflation and higher interest rates tighten purse strings across the world. And, there’s no telling when these threats will be minimised or removed.
The best course of action for businesses facing an uncertain future is to adopt proactive measures to enhance their resilience amidst such challenges. Being in a position to actively understand and minimise risks is fundamental to an organisation’s capacity to successfully navigate turbulent times. But what does this actually look like for businesses today? Let’s dig a bit deeper.
It’s one thing to say, “businesses need to be proactive,” but it’s another to consider this in practice. Actively minimising risk and ensuring resilience means having the right information to hand so you can make those proactive decisions for the good of your business. This means understanding your organisation – inside and out.
To truly know your business, having access to the latest data is vital to getting insight into every level of the organisation. From internal data concerning customer communications to external information such as market stability or supply chain issues.
We found that an overwhelming majority (77%) of business leaders believe data will play a crucial role in helping their business navigate the turbulent times ahead. But just over a quarter (27%) rate their business’ resilience during turbulent times as “extremely resilient”.
It’s clear there’s a disconnect between using data effectively and being prepared for challenging events on the horizon. And it’s critical that a larger portion of businesses develop a higher level of resilience to remain solvent, and agile, to change – all while readying themselves for growth and innovation.
So, what’s getting in the way of businesses struggling to use their data and ensure resilience?
If you’re using a broken compass to navigate, you’ll likely end up going the wrong way. You will need fix the compass if you want to get to your destination. The same goes for those at the helm of their business trying to navigate without the right tools to do so effectively.
According to our research, 80% of organisations are struggling to manage the volume, variety and velocity of their data. In short, they might have the information they need to point them in the right direction but don’t have the ability to process the data to make a decision on the best course of action.
This is reinforced by 85% of business leaders stating they currently do not use data to understand disruption in their ecosystem. Which also means that as little as 15% of businesses are using insight from their data to build a strong understanding of the challenges their company is facing to inform resilient, risk-adverse strategies and spot opportunities.
Businesses need more guidance. They need the right tools to understand their data and help make the best decisions for their business no matter the disruptions that lie ahead.
While it’s important for businesses to minimise risk and protect their assets during times of economic uncertainty, our research highlighted a healthy appetite for growth and opportunity among leaders – with 34% reporting they are using data in their organisations to drive growth.
Organisations that can navigate risk, will be the same ones set up to identify and pursue opportunities during challenging times and even emerge from economic downturns stronger than ever.
Whether you are looking to better understand the current state of turbulence in your market or identify opportunities to remain competitive during uncertainty, prioritising business resilience with a strategic, long-term approach is fundamental. And this means utilising data to scenario plan and model outcomes – ensuring your business decisions are backed by trend analysis and predictive analytics.
For example, ensuring a flexible supply chain aided by data-driven insights could be the difference between responding rapidly to unforeseen events or operations coming to a grinding halt. We all know which one we’d rather become reality.
The hurdle isn’t about needing more leaders to value data in their decision making, rather it’s the business’ ability to unlock the true value of its data. Getting this right – with access to technologies that help you process and analyse your business data – will provide valuable insight to increase business resilience. So, your organisation can face any challenges on the horizon – no matter how sustained or extreme they might be.
Business resilience refers to a company's ability to adapt and recover from disruptions, ensuring continuity and maintaining operations during challenging times.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power and affecting economic stability.
Risk management involves identifying, assessing, and prioritizing risks followed by coordinated efforts to minimize, monitor, and control the probability of unfortunate events.
Monetary policy is the process by which a central bank manages the money supply and interest rates to influence economic activity and control inflation.
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