In the face of the current high inflation environment, businesses are exploring various strategies to maintain operational efficiency and manage costs. One such strategy is the implementation of Cloud technology. In this article, we’ll explore how the Cloud can help businesses to navigate this challenging economic landscape.
CFOs are facing challenging times
Chief Financial Officers (CFOs) find themselves in quite a tricky position because of inflationary pressures. Tasked with overseeing and approving technological outlays, they must ensure every decision is right in this regard if they’re to maintain financial stability within their organisation.
Inflation pressures are a significant concern, as they have far-reaching implications for business operations, cost management, and profitability. CFOs, therefore, need to be adept at making strategic decisions under these conditions, particularly when it comes to technological investments.
Moreover, talent acquisition and retention emerge as top concerns for CFOs. Attracting and retaining the right talent is crucial for driving growth and innovation. However, the current preference for more traditional problem-solving and strategic business thinking skills may pose difficulties in finding suitable candidates.
Cloud technology is a proven way to give CFOs more control and to future-proof their operations against the rapidly improving capabilities of competitors. But they must consider every facet of this adoption, from implementation all the way through everyday use, if they are to get the most out of this tool. They should also consider the likely benefits (such as better financial forecasting) and choose a system that is suitable to their specific needs and structures.
Transitioning from capital expenditure (CapEx) to operational expenditure (OpEx) through Cloud implementation can reduce investment in depreciating assets that will inevitably need updating at some point in the future anyway.
How Cloud tech can help fight inflation
Inflation, a persistent upward trend in the general level of prices for goods and services, can have a range of negative impacts on the economy. The most immediate and apparent effect is the erosion of purchasing power. As prices rise, each unit of currency buys fewer goods and services, leading to a decrease in the standard of living. It also results in higher interest rates, which increases the cost of borrowing and can deter investment.
The impact of inflation extends to businesses as well, with rising rents, utilities, and employee wages driving up operational costs5. This can strain financial resources and hamper business growth.
Despite these challenges, cloud technology offers an effective countermeasure against the pressures of inflation. By transitioning to cloud services, businesses can leverage economies of scale, resulting in cost savings and increased operational efficiency.
Moreover, consolidating cloud services can streamline operations, achieve better visibility, and control over costs, and potentially negotiate better terms with service providers. Transitioning to the power of cloud can help combat the pressures of inflation.
5 ways to reduce the effects of high inflation with the Cloud
1. Boosting productivity and mitigating risks
During periods of substantial inflation, businesses come across mounting expenses for goods and services. By dedicating a considerable segment of their budget to technology, they can streamline processes and boost productivity within their workforce. As a result, they can cut out unnecessary costs and generate greater income, thus offsetting the repercussions of inflation.
On top of this, utilising the likes of Cloud technology can decrease the likelihood of data loss/theft, as information is securely housed off-site and protected by the service provider.
2. Investing in talent and automation
Automation significantly reduces labour costs, which would otherwise represent a major expense for any business. Cloud technology in finance often incorporates built-in tools for automation, so that employees can take their focus away from repetitive data entry and subsequently optimise their time and energy. It gives these employees a chance to master digital tools that will be crucial for their career going forward, while also providing them with the capacity to complete other types of learning within their field. This capability not only allows companies to improve their own workforce, but to attract talent from elsewhere too.
3. Exploring third-party services
Third-party Cloud service providers represent a cost-effective method for handling IT requirements. They cut out the need for substantial capital expenditures on hardware installation/maintenance, maintaining servers at an offsite location as part of their ongoing service. This type of service cuts out nasty financial surprises in relation to support and fixes, which can be a godsend when inflation is high.
4. Greater focus on strategy
Streamlined tasks and automation don’t just give staff more time for training/learning, they also allow them to focus more on value-adding activities and strategy. When times are tough during periods of economic inflation, businesses need to tap into the wisdom/potential of everyone they employ. Cloud-based accounting systems allow all members of the finance department to have their say in strategy.
5. Improved efficiency with AI and Cloud technology
In today's data-centric business environment, the ability to leverage information is paramount. This is particularly relevant in an inflationary economy, where optimising costs and improving operational efficiency are vital for maintaining a competitive edge. Cloud technology plays a critical role, providing businesses with access to advanced data analytics tools that can yield actionable insights.
Cloud-based platforms offer superior processing capabilities compared to traditional on-premises systems, enabling businesses to handle vast volumes of data in real-time. The cost-efficiency of these platforms is another key advantage, as they negate the need for heavy investment in hardware and maintenance.
Artificial Intelligence plays an integral role in the functionality of these data analytics tools. AI algorithms can analyse complex datasets, identify patterns and trends, and provide businesses with predictive insights. These insights can highlight inefficiencies in operations, enabling businesses to streamline processes and reduce waste, thereby lowering operational costs.
Embracing Cloud implementation to beat inflation
Cloud computing offers a level of scalability that is crucial during economic inflation. It allows organisations to grow or downsize accordingly as and when the situation changes. This type of agility is hugely beneficial at a time of non-stop fluctuations.
Our Cloud-based accounting solution, Advanced Financials, is extremely flexible, growing and shrinking in line with your operational needs. This financial management software, like many Cloud platforms, integrates easily with other solutions so that data is as cohesive as possible, and people across the business can access the information they need exactly when they need it.
With easy-to-navigate dashboards, and pre-built reports that can be customised, Advanced Financials allows finance teams to gain an instant view of company performance so that they can pivot quickly and feed insights to key stakeholders.
If you want to harness the power of the Cloud to tackle the high inflation environment, be sure to get in touch today.