Exploring digital technology to combat inflation
As global inflation continues to affect economies, businesses are faced with pressure from high input costs, wage inflation, supply chain, competition, overheads, and customer expectations. A recent report revealed that the eurozone is reeling under inflation of 10.10%, while the US has struggled to bring inflation down to 8.26% from 8.5% since August. The scenario in emerging economies is no different. These global trends are driving demand for digital transformations to optimise processes, cut costs, and combat inflation.
Digital technology to combat inflation
Across business functions, technology enhances efficiency, lowers operational costs, and creates a deflationary effect, which stabilises business costs, and thereby, the price of products or services. Well-planned digital initiatives provide long-term benefits to mitigate the impact of inflation.
- Digital solutions integrate data from various sources and drive visibility, which helps in predicting disruptions, assessing risks, and maintaining supply chain pressures at bay.
- Digital transformation boosts agility and supports faster and more accurate decision-making across domains such as production, sales, logistics, and customer experience.
- There is a correlation between business growth and the complexity of vendor, supplier, and warehouse networks. Digital management makes coordination among these entities easier and streamlines processes such as procurement, supply chains, marketing, and financial planning.
- Digital technology supports collaboration with diverse partner organisations by streamlining communication and providing a holistic view of business relations with local and global partners by using diverse analytics and common cloud software platforms.
- Predictive analytics powered by AI-enabled solutions act as an early-warning system to coordinate and plan for emergencies and challenging forecasts.
Strategies to combat inflation
Businesses need to implement strategies in order to combat inflation and ease the pressure of rising input and labour costs to stay resilient.
- Streamline decision-making with the help of insights gained through AI- and ML-enabled demand planning solutions. By using predictive analysis, businesses can assess future demand, plan inventory levels, and optimise the supply chain to curtail wastage of time and money.
- AI- and ML-powered technologies such as control towers support real-time data on supply chains, production, and sales efforts, allowing businesses to take timely decisions based on developing events.
- Microservices for customers help retailers in improving the customer experience while reducing the cost of retaining a large talent pool. RPA and AI- or ML-led solutions improve fulfilment visibility, simplify customer management services, and streamline administrative tasks.
- A digital or virtual twin solution provides a virtual representation of how processes are interconnected through a pipeline. It allows businesses to bridge gaps and fix loopholes in linked processes. The advantages of a digital twin experience range from improved efficiency and low failure rates to quicker development cycles and cost benefits.
- Automating workflows has now become necessary for businesses to achieve better time and cost efficiencies. Speedy and streamlined administrative tasks, sales reporting, data entry, and documentation reduce bottlenecks, reduce costs, and save time spent on repetitive tasks.
- Automated invoicing and billing needs to be digitised to save time and cost. Almost 62% of invoice processing time involves data entry, validation, and approval. However, automating the accounts payable process reduces this time by up to 90% and reduces errors, creating accurate records for further use.
Selecting the right tools and methods
Digital solutions can use a fit-for-purpose method to create meaningful insights and draw value from the business. The best practices to induct digital technology to combat inflation must include identifying the problem statement, benchmarking against the competition, and then designing performance-ready processes and bringing transformation. Here are some pointers that can help you in selecting the right tools and methods to adopt digital initiatives:
- Choose flexible resource allocation and steer clear from traditional or rigid funding models.
- Assess various business strategies regularly to evaluate the benefits of new technology and weigh the need for new deployments.
- Bring your portfolio in line with your business vision by divesting business lines, which can bring down the costs of products or services.
- Encourage data literacy and formalise data governance to use accurate and relevant data for business insights that can optimise resources and cut costs.
- Choose appropriate metrics and define KPIs to assess the success of digital solutions and understand their full impact.
- Convince the stakeholders that adopting digital solutions is one of the ways to combat inflation.
- Partner with BPOs to reduce expensive labour costs and gain subject matter expertise.
- Use predictive analysis by leveraging ML- and AI-based digital solutions to prepare for contingencies.
- Update or replace legacy systems.
- Integrate data and make it accessible for a holistic view of the business.
For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.
How can Infosys BPM help?
The business transformation services from Infosys BPM bring deep domain experience in key business functions and industry-specific areas such as banking, telecommunications, and insurance.