Tech Supports Business in Brexit Crisis

The stresses of Brexit on international businesses are not insurmountable, but the lack of clarity coming out of Westminster is causing huge unrest within the business community.

The only thing that’s certain is uncertainty itself

At the time of writing, Theresa May’s third meaningful vote had been rejected, throwing more uncertainty into the air, and increasing the likelihood of a no-deal exit on April 12. Business groups such as the Confederation of British Industry (CBI) called the rejection of this latest Brexit vote “a nightmare for businesses”. Now, the UK is waiting with bated breath to discover the outcome of the latest cross-party talks, and whether the House of Commons can prevent a no-deal Brexit.

On top of that, the pound is down 20% since the original referendum result in June 2016. Despite it steadying since the meaningful vote held on March 29 (because the markets predicted a failure), investors do not want to be on the wrong side of a currency rebound, which means a weak pound is the “new normal” for businesses to plan for.

As politics fails, tech steps in

Until the Brexit dust settles, businesses are having to make adjustments and suspend certain activities without any clarity from Parliament. Activities such as reviewing suppliers, updating supply chains, stock piling, re-evaluating margins as a result of changes to potential EU preferential rates, and reviewing possible changes to credit ratings are all being examined.

As politics fails, technology is having to step in to try to help businesses manage these activities. Some of the UK’s major conglomerates are ramping up their use of technology to simulate the impact of different versions of Brexit on their business operations. Based on conversations with customers, those simulations chiefly revolve around inventory planning, currency movements, and any potential changes to credit ratings. Overall, this amounts to calculating between 50 and 100 ‘what-if’ scenarios a week using technology, and that changes daily depending on activity in Westminster.

Remaining agile

Any type of political uncertainty requires a finance team to be incredibly agile when reporting to management teams, regulators, and shareholders, and this is especially so for businesses with complicated supply chains.

The amounts of data that need analysing across various systems of record can be huge when planning for, for example, a no-deal Brexit. However, time-intensive data extraction is not possible any more; manually compiled Excel spreadsheets that lead to human errors make certain data untrustworthy and can’t be relied on when making sound business decisions.

At this stage, if a finance team wanted to implement a traditional reporting system, it would be fraught with problems. They would have to hire programmers and allow for huge implementation times to get everything working. Therefore, the only way for a finance team to remain agile in an uncertain world is to create calculations and predictions from live data, with automated, flexible enterprise resource planning (ERP) reporting to satisfy stakeholders, customers, and shareholders quickly.

“A new you”

ERP reporting systems are able to elevate the finance department to being a department of strategic analysis, rather than the ‘folks who do the numbers’. By freeing up time that was previously spent compiling data, finance teams now have more capacity to focus on analysing and interpreting that data. Now more than ever, as the Brexit process continues, CFOs and their teams are making groundbreaking decisions, helping to shape a company’s Brexit strategy and its future role in the UK. This is both a blessing and a curse, meaning an internal review of reporting needs to take place as a first step, as the Brexit process struggles on.