There is a constant looming presence that business leaders in all industries must consider, and ignoring its impact will lead to an eventual downfall. This presence, if unaccounted for, increases costs, negatively impacts cash flow, and renders all potential gains inert.
Inflation, a core concept of any economy, is known by everyone in the business world but is often forgotten during strategy or planning, so the usual solution when inflation hits is a price increase. Unfortunately, inflation keeps businesses from maximizing their profit margins and growing in their market. For the IT industry, this also means the rising costs associated with collecting, using, managing, storing, and securing data. According to Gartner, more than half of enterprise IT spending will shift to the cloud by 2025, with more than $1.3 trillion predicted to move in 2022 alone.
For businesses, inflation is a multi-dimensional issue because it affects revenue, expenses, and pricing—leading to lower profit margins and painful cost-cutting. To combat inflation, the best strategy is to look forward to processes, practices, and strategies where optimization is the primary goal. Efficient optimized processes are the best way to form a more inflation-resistant organization.
This is where digital transformation comes into play. Digital platforms have the potential to significantly increase profitability by optimizing the labor required to sell, produce, or charge for services or products. The automation and reduced labor equity requirement allows businesses to keep expense growth to a minimum while focusing on higher-value tasks that promote growth and visibility.
How can today’s software innovations help businesses combat inflation? To borrow a quote from Asaf Darash, the CEO of Regpack: “Using the power of automation to shorten the payments process is smart at any juncture, particularly in an inflationary environment such as the one we’re in now,” he says. “This technology can help business leaders navigate the headwinds by putting payments and many billing functions on autopilot.”
The first step is choosing the right platform for your optimization and automation goals. If your management team selects the right platform, it’ll remove labor hurdles and allow executives to allocate employees toward growth-related tasks such as building client rapport, marketing, and outreach. The more a platform can optimize and automate business processes, the more time and resources it saves.
Businesses should start their digital process with an automation platform, especially one that begins and ends with payments. A payment platform can handle billing, invoicing, client notification, and pricing updates, all while providing the additional benefits of consistency, transparency, control, and risk management. The best platforms are like Lego blocks: flexible and highly customizable, allowing companies to manage tasks systematically without needing an expensive customized solution. Of course, every company’s challenges are different, but the ability to tailor a platform to their needs is necessary.
The immediate benefit of using any platform should be its reduced cost, as your operations should require less direct manual input. Automation will also create a more predictable cash flow, which helps companies scale and expand without additional strain. The result is an increased profit margin from preventing increased labor costs while boosting capability within your existing infrastructure.
“Clients who are using these software innovations are seeing results,” says Calvin Hosey, head of operations and payment partnerships at Regpack. “We believe that intelligent technology can lower company costs and increase revenue, thus reducing the impacts of global inflation—and we practice what we preach. “
To ensure internal tasks flow smoothly, Hosey says that every business should—at a minimum—choose a payment-based platform. Of course, there will never be a foolproof way to defend against inflation, but exploring the digital landscape for systems that can optimize and automate some of your existing processes is an essential first step.
Whichever platform you decide, it’s evident that automation is needed. The truth is in the data—McKinsey estimates that in about 60% of occupations, at least one-third of workday activities could be automated. Another study suggests that 90% of employees feel burdened with repetitive tasks. While 31% of businesses have fully automated at least one business function, companies need to look at their operations holistically to see where else automation may benefit their efficiency and profit margins.
This isn’t a call to replace your workforce or your team, as they are still integral parts of your company. It’s a wake-up call that it’s time to explore options that will allow your management team to put their skills to better use. The time spent manually compiling payment and revenue data can instead be spent reviewing data populated from your software, and brainstorming and acting on growth opportunities. Transparency is key to understanding where you’ve been, where you are, and where you’re going.
Every company is different. There is no one-size-fits-all method of navigating the business world. However, if you’re not exploring ways to simplify, optimize, or automate your operations, you’re not giving your company a fighting chance.