Why is Brexit a Game Changer for Procurement and Financial Professionals?
- All Industries
The shock was not only for Britain. UK leaving the European Union, aka “Brexit”, has shaken the global markets and left tremendous uncertainty in all directions.
Those who voted in favour of Brexit argued that doing so would benefit the UK over the long term. Yet businesses, investors, and analysts think that in the short term this will take the world’s economy (especially stocks, bonds, currencies, and foremost the British pound) on a roller coaster ride.
Many have offered speculations and theories around how Britain leaving the Europe will affect European as well as global markets.
More than one month into the Brexit process, here are some of the facts we know so far:
- On June 23rd Pound was worth $1.50 and 1.30€. Now it is worth $1.30 and 1.18€. Bloomberg reported in early July that the Pound had overtaken Argentinian Peso as the world’s worst performing currency in 2016.
- UK Economy is shrinking at quarterly 4 percent and economists say there is a high risk that the country faces recession.
- Higher Education was not immune. British researchers receive about £1bn each year from EU funding programmes, but access to the money must be completely renegotiated under Brexit.
Yet there’s still much we don’t truly know. For instance, how does Brexit impact each business in Europe and UK within the next couple of years?
Various business analysts have conducted surveys and studies on the impact. These studies show that executives are most concerned with how all this will influence their organisation’s revenues, investments and employees. Retailers are afraid of the economic downturn as this could hit consumer spending. Some manufacturing as well as giant telecommunication companies warned they may move their headquarters out of the UK to other EU countries.
With negative predictions outweighing the positive ones by a factor of roughly 4 to 1, analysts’ pessimistic forecast also applies to Brexit’s impact on the finance industry’s revenue, investment and employment levels three years after the exit.
In this unstable and volatile economy, executives are looking to gain even more control in order to steer the ship in the right direction. Focusing on ways to manage and track savings initiatives as well as streamlining processes and focus on growth are logical places to start.
What can procurement professionals do to mitigate the harmful effects of Brexit?
One of the most common and efficient strategies is to implement new technology initiatives that could simplify business workflows, improving efficiency and control.
For example, procurement professionals and their organisations can more effectively manage supplier spending and simplify costly processes through an automated supplier management tool. By implementing a sophisticated sourcing solution they could reduce spend and savings leakage by making better, more informed decisions that factor in the needs of all stakeholders. In the scientific research environment, an automated chemical inventory management solution can optimise chemical inventory and promote regulatory compliance while also managing the risks associated with hazardous materials.
If you are keen to learn more about automated and streamlined business processes and how these can help you navigate through this challenging time, contact us today.