For companies to thrive amid economic uncertainty, value creation is key

For companies to thrive amid economic uncertainty, value creation is key

Mahesh Rajasekharan President and CEO of Clio.

We’re halfway through 2022 and, as has been the case for the past few years, economic uncertainty and market disruption continue. Although pandemic fears have subsided, inflation remains red-hot, the labor market is tight and the Fed’s efforts to control inflation have led to higher interest rates. Recession? Maybe, maybe not. But the rocky road? No question, and here’s why.

On the one hand, supply chains are still constrained by pandemic-driven disruptions. The resulting delays and increased costs caused a slowdown in manufacturing productivity, which combined with the stimulus-induced money supply caused rampant inflation. On the other hand, given the Fed’s efforts to tighten the money supply, it’s a safe bet that liquidity will decrease, potentially further hampering future chain demand. So, we’re dealing with a double whammy this year – shocks on both the supply and demand sides of the equation – and we should expect to see even more disruption in the months and years ahead.

To deal with the sustained economic uncertainty predicted to be headed our way, companies will need organizational agility more than ever if they want to survive and thrive. By that, I mean having control over the data, business intelligence, and integration technologies that fundamentally drive their business, so they can make their company turn on a dime, change direction, and make mission-critical decisions right on their own terms. .

But where will the organizations get so much agility? And more fundamentally, why is it so important for value creation?

Organizational agility comes from supply chain agility. And supply chain agility results from integration agility. Understanding the interdependencies here is important because hidden within this technological truth are countless powerful ways for companies to gain agility to discover and create business value for their stakeholders.

Today’s disruption is not entirely due to the pandemic or recent government fiscal policies. There are many other causes of supply and demand chain disruptions. In this case:

The relentless expansion of e-commerce.

Accelerated growth of universal fulfillment with reverse logistics.

New cyber threats such as ransomware and data theft are on the rise.

Geopolitical unrest, such as the war in Ukraine.

Of course, there are other contributing factors, but the bottom line is that disruption and uncertainty aren’t going away anytime soon. So, how can today’s business leaders leverage modern integration technologies to find new ways to add value to their companies?

First, they need to understand and accept that the world we live in is going to be unstable for a long time. As an integration software provider, my company actually saw this scene emerge in 2017, when we said that the traditional EDI-only B2B integration approach would not be enough and launched a different kind of integration platform.

Since then, listening to our customers in manufacturing, logistics, transportation, distribution, retail and other industries, it has become clear that business leaders want their supply chains to be more agile, robust, flexible and reliable. And with the rapid growth of subscription-based, cloud-technology-driven applications (many connected via APIs or application programming interfaces), the most savvy senior managers are recognizing the critical role a good integration strategy can play in their ongoing digital business transformation. .

In integration-speak, this means we live in a world where API and EDI technologies must coexist. With e-commerce exploding, especially during a pandemic, and fulfillment and delivery expectations ever-changing, integration has quickly become a board-level topic as companies look for every way imaginable to manage growth and increase scale.

As a CEO in the integration technology space, I see and hear about supply chain and integration challenges every day. Companies that are spending money to solve their integration problems are also finding innovative ways to address their competitive business challenges. And most of that, quite honestly, stems from a change in their mindset.

For example, senior leaders who view their business as an ecosystem of customers, partners, applications, marketplaces and platforms – and who recognize that integration can be a fundamental relationship builder and revenue driver – most clearly understand how their integration strategy, supply chain agility and organizational decisions Adoption is closely related. What’s more, all applications along the end-to-end continuum, such as ERP, WMS, TMS and CRM systems, need to be rethought from the perspective of this modern, “outside-in” business process of value creation so that businesses can thrive within the continuum. uncertainty

Having organizational agility is essential to thrive in times of market uncertainty. By opting for more business process automation and moving integration to the cloud, today’s companies can position themselves for growth no matter how disruptive the markets. How? Consider everything you do as a “value creation” opportunity. Look at each project from a financial perspective. Clearly define goals and KPIs and link them to ROI.

Here are four things you can do to create value right away:

Take good care of your existing customers.

Go aggressively after new revenue.

Reexamine your cost structure and, where possible, repurpose it towards digital efforts.

Be fearless, optimistic and relentlessly persistent!

How can you attack all of that at once? One way is an ecosystem integration strategy. The time for ecosystem integration has come because regardless of what happens to the supply chain in the coming years, be it on the supply side or the demand side, business leaders need to be prepared for the shocks to come—whether they’re on the supply side or the demand side. Or both. And that’s why organizations need agility—the kind of decision-making agility they can get through a solid ecosystem integration strategy.

Bottom line: Your organization’s agility is a direct result of your company’s supply chain agility. And that’s a function of how well integrated your company’s business ecosystem is.

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