August 09, 2022 | Supply Chain Strategy
While the events of the past two years have had an impact on all business functions, some teams have struggled more than others.
In most organizations, supply chain and procurement teams have struggled the most in the face of unforeseen disruptions. Not surprisingly, many of them plan to leverage technology to transform — and future-proof — their operations.
However, not many organizations have talked about the impact of disruption on teams such as IT, finance or sales and marketing.
How have these and other business functions fared during this time? And what are their key challenges going forward?
Different business functions face challenges of a different nature, according to an Economist Impact report The Cost-Plus World of Supply Chains that surveyed 400 senior executives in the U.S. and Europe between December 2021 and February 2022.
For finance teams, 56.3% of respondents stated that securing lines of credit from investors and funders is the most significant challenge. This clearly stems from the prevailing uncertainty in the business environment. According to 43.8% respondents, a key challenge is the requirement to produce financial information to inform operational actions.
Two-third of survey respondents that work in finance suggest that disruption has resulted in increased operating costs for organizations. Although cutting down on costs may not be an immediate priority for businesses as they look to build resilience, they would be keen not to let costs go out of hand.
Another challenge for finance relates to efficiently managing cash flows and reserves, as pointed out by 40.6% of respondents.
Sales and marketing teams have also witnessed significant challenges during this time. Up to 70% of the respondents said that retaining customer loyalty is now a top priority to mitigate disruption-related challenges. Adapting to evolving consumer preferences, modifying methods of interaction with customers, managing impact on brand reputation and expanding collaboration with supply chain function are also high on the priority list.
For IT teams, the last two years have accelerated the transition toward digital transformation. In many enterprises, CIOs are now looking to actively work with CSCOs and CPOs to digitalize their operations and develop understanding of how to make the best use of technology.
Many businesses also look to deploy low-code no-code platforms that can reduce the dependence on IT teams and enable non-tech citizen developers to design useful applications.
While different business functions have different things on their priority list, they all have one agenda in common – to work in close collaboration with procurement and supply chain functions.
The finance team, for instance, must actively collaborate with procurement to improve cash flow and achieve rapid cost reduction. Instead of engaging procurement merely for supplier negotiations, finance teams must involve procurement upfront in the budgeting process. Such involvement early on can align procurement and finance objectives and help both teams work with a unified taxonomy for spend categories.
Likewise, IT leaders must work closely with their supply chain counterparts to accelerate the adoption of supply chain software technology and automate routine manual tasks.
Also Read: Guide to Supply Chain Management