New survey finds that UK companies are not ‘Brexit ready’, citing supplier relationships and spend visibility as top focus areas
16 October, 2019, LONDON: As the Brexit deadline approaches, a new survey commissioned by Coupa Software (NASDAQ: COUP), a leader in Business Spend Management (BSM), revealed that, while the majority (96 per cent) of UK senior finance decision makers in large companies have been preparing for Brexit for the past year, the work to become post-Brexit ready is still an uphill battle. Respondents cited supplier relationships and spend visibility as top focus areas.
Of the 253 senior finance decision makers surveyed, 54 per cent cited supplier relationships as the part of their business most likely to be impacted by Brexit, above disruption with profits, customer relationships, and payroll. Furthermore, 51 percent of respondents said that on the day of Brexit, they expect to renegotiate contracts with their suppliers to return to business as usual.
The survey also found that going into Brexit, nearly two-thirds of finance decision makers (63 per cent) said they lack complete visibility into their business spend, and 62 per cent said that they are not very confident in their company’s spend decisions. Their views on stockpiling are evidence of this – nearly 66 per cent say they feel stockpiling is an effective precaution for businesses in uncertain economies.
“In today’s environment, it’s imperative that businesses have the visibility and control they need to respond quickly amid economic uncertainty, and that’s no more apparent than what UK businesses face with Brexit,” said Rob Bernshteyn, chairman and CEO of Coupa. “Having modern technologies will help companies navigate these changes by empowering them to establish the right supplier relationships and spend smarter every day.”
Preparing for Brexit
As the situation with Brexit becomes clearer, businesses will immediately need to take steps to determine if their supplier contracts remain valid, how any cost increases will impact their profitability, and if necessary, how they will find new, local suppliers to avoid any business disruptions.
To prepare for Brexit, companies should consider following the five steps:
- Get Full Visibility into Business Spend: Leverage people, processes, and technology to consolidate all of your business spend into a single view that enables you to evaluate how your suppliers will be impacted.
- Ensure Business Spend Processes are Agile: Do the due diligence now and invest in highly configurable business spend processes and technologies, including supplier risk management, so you can rapidly adapt to new regulatory and trading environments.
- Implement Contract Certainty: Get ahead of the contracts that will require amendments, re-tendering, or additional clauses with a well-maintained, enterprise-grade contract lifecycle management solution.
- Understand Supplier Risk: Get a real-time view into supply chain risks such as a supplier’s ability to handle border crossing or how tariffs might affect their ability to fulfill contract obligations.
- Establish Enforceable Spend Policies: To prepare for this and ensure you can achieve your planned budget, establish clear and enforceable policies, including controls and approval chains to ensure that preferred suppliers are used.