It sounds like something from the deep past of the 70s, like disco balls and bell bottoms. But inflation is back. In the US, it’s over 5%. In the UK, where we have many clients, The Bank of England warns it could reach 4%.
While we don’t see it reaching the heights of the bad old days, these relatively high levels of inflation — and the subsequent interest rate hikes — may lead to changes in business fundamentals that we haven’t seen for some time.
As in any emerging situation, the question for us is, what does this mean to our mid-market clients? Our Regional Directors had a virtual conference to talk it through.
The stories from our clients are dramatic:
- Prices for shipping and building materials have doubled
- Gas prices up 40%
- Rising labor costs in hospitality and retail
- Lawyers and other experts are raising their rates
- Salaries for certain IT skills have skyrocketed.
So we’re concerned. But we’ve been listening to our clients and thinking hard about it, and we believe there are ways of managing inflation.
Here is what we are recommending to our mid-market clients:
Take a step back and look at your markets and customers and revisit the basic strategic questions: what do they want? How do you give it to them?
2. Speed up reporting.
Demand, costs, prices, and supply are changing rapidly; pricing and purchasing decisions need to be made quickly. You need faster internal information flow for your reporting.
3. Automate to reduce costs.
Replace aging ERP systems. Integrate your processes. Use bots for the first line of customer service—consumers are used to them by now. You won’t be able to automate everything, nor should you. But where can you?
4. Improve online experiences.
Look at your front end through a customer’s eyes. Is the product imagery and information detailed enough? Attractively presented? Are you delivering a simple user experience for even complex purchases?
Inflation is affecting almost every business sector from construction to investment management. But the real danger isn’t pricing, it’s complacency. It’s adapt or die: the winners will be those companies continually reassessing the opportunities, staying alert, and moving quickly.
If you need help with your business, get in touch.
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Freeman Clarke is the largest and most experienced team of part-time, or fractional, IT leaders. We work exclusively with organizations looking to use IT to grow their business. For an informal conversation, contact us and we’ll be in touch.