Inflation can have a profound impact on businesses, affecting various aspects of their operations and financial stability. One of the most immediate effects is the erosion of purchasing power. As prices rise, the value of money diminishes. This makes it more expensive for businesses to procure essential resources such as raw materials, labor, and capital. This leads to increased production costs and reduced profit margins, especially if a company cannot pass these cost increases onto consumers through higher prices. Additionally, inflation can create uncertainty in financial planning and budgeting, making it challenging for businesses to make accurate forecasts and strategic decisions. Inflation will also disrupt long-term contracts and agreements, causing contractual obligations to lose their real value over time. In such an environment, businesses must adapt by implementing inflation-hedging strategies, pricing adjustments, and proactive financial management to maintain their competitiveness and financial stability.
Since it’s budget season for many Delmarva organizations, we thought we would put together some tips to help use business technology to address inflationary pressures that exist in the market right now.
Strategy #1 – Invest Sooner, Rather than Later
As the dollar looses value over time, prices will rise to compensate. The cost of hardware and labor will increase, making any kind of technology investment more capital intensive. Your cost to provide products and services to your customers will increase, further restricting cash flow. If you’ve been putting off new PCs, networking equipment, or limping along with a business telephone system that’s nothing more than “adequate,” you might want to take a closer look at what upgrades you can do right now and in the near future..
Tip: Many technology solutions can be financed with a lease. If your solution generates a recurring, hard dollar savings every month you have improved cash flow with little or no money spent out of pocket.
Strategy #2 – Address Employee Needs
Wages and Compensation:
When prices for housing, transportation, food, and life in general outpace wage growth, employees are going to consider how they can increase their own income. While real wage growth has increased approximately 7.1% since 2020, prices have increased by 18%. The average employee has essentially taken an 11% pay cut.
While deploying new technologies can’t directly grow wages, strategic use of technology can generate cash savings to offset the organization’s need to better compensate employees. At Inacom, we have frequently used Sharp MFPs and Telecommunication Audits to generate 5-figure and 6-figure cash savings for area businesses. These funds can be allocated to offer employees more competitive compensation packages.
Flexible Work Arrangements:
Not every employee measures job satisfaction in strict dollar terms. Quality of Life means a lot, too. That often means flexible work arrangements. This often means jobs transition into Work From Home or Hybrid positions. Your organization can accommodate work from home arrangements with remote access technologies and cloud services like Microsoft 365.
Strategy #3 – Increase Employee Productivity
Employee productivity is the ultimate driver in determining how high compensation levels can go for a given position. It’s difficult to pay more in dollars and the amount of value an employee can produce, right?
This can lead to situations where employees feel pressured to deliver more than they can realistically sustain over the long term. Employees will feel overworked and burnt-out. This feeling is often exacerbated by inefficient workflows that are unnecessarily time consuming and repetitive.
Technology can help by making job tasks easier and faster to accomplish. This reduces stress and burdens on the employee, improves customer service levels, and improves your organization’s bottom line.
Some productivity enhancements that you might want to investigate include:
- Business Telephone Systems: Intelligently route callers to the right person, create teams of employees to handle call flows, integrate business software to provide “screen pops” to remove repetitive clicks to customer account data. Provide telephone system access from anywhere with an Internet connection for WFH and hybrid work arrangements.
- Capture and Process Documents Right at the MFP: Scanning processes are notoriously slow and cumbersome. We’ve created workflows where an employee walks up to the copier, pushes a few buttons, and scans the document. Automation extracts text, routes the document, and properly stores it for retrieval in the future. We’ve turned 10 minute tasks into 30 second tasks. Multiply that time savings by dozens of scans per day and the productivity boost becomes very significant.
- Introduce Business Process Automation: Microsoft Power Automate offers organizations increased efficiency and productivity by automating repetitive tasks, reducing errors, and enabling faster decision-making. Its seamless integration with the Microsoft ecosystem ensures a smooth workflow, while customization options cater to specific needs. Additionally, it provides scalability, security, and compliance, supporting growth and data privacy requirements. Many organizations are already in the Microsoft 365 ecosystem, but relatively few have investigated or began using Power Automate. We’re engaged in multiple IT Consulting Agreements to help organizations with this solution.
In conclusion, as businesses navigate the challenges posed by inflation, leveraging technology becomes increasingly critical. We’ve discussed three strategies to address these pressures: Investing Sooner, which contains costs as prices increase; addressing Employee Needs, including compensation and flexible work arrangements, to retain and attract talent; and finally, Increasing Employee Productivity, which is key to sustaining competitiveness and reducing burnout.
Each year, from October to December, we make complimentary consultations with our clients to help them plan for next year’s budget. Would you like to discuss your needs? Use the CallPage widget to the right and we’ll get you scheduled.