Digital innovation is the best defence against rising inflation
South African businesses are facing mounting pressure as inflation reaches 7.8%. Those hardest hit are SMMEs who rely on cash flow to stay afloat, with many having to cut non-essentials to streamline their operations and eliminate unnecessary vulnerabilities. For those navigating their post pandemic digital transformation, it is easy to fall into the trap of reducing spend on technology in lieu of cutting back in other areas. However, sound digital transformation and adoption of technology solutions can be used as a long-term strategy to combat rising inflation.
Scaling back on digital transformation initiatives in the face of inflation is a short-sighted approach. Instead, CFOs should be looking at technology and innovation through a different lens – one that will reduce spend and, ultimately, the long-term cost of doing business.
Digital deflation is the key to long-term and profitable growth
As opposed to deflation which can be just as detrimental to businesses as inflation, digital deflation proposes investment in innovation and technology to permanently reduce operational costs.
In the current economic climate, digital deflation can be optimised by planned and implemented digital strategies that have the potential to bring down labour, production and delivery costs through increased innovation and productivity.
Using tech to combat inflation just makes sense. But it requires reimagined strategies that go beyond short-term reactive moves to ones that place focus on identifying opportunities to build a long-term competitive and tech savvy advantage that is robust enough to carry the business through ever-changing economic cycles.
These strategies must include a fit-for-purpose methodology to create meaningful, value-driven insights based on best practice that includes identifying the problem statement, benchmarking against the competition, and then designing performance-ready processes that accelerate transformation. Examples of digitisation process that can effectively combat inflation include, among others:
- Workflow automation to achieve improved time and cost efficiencies such as speedy and streamlined administrative tasks, sales reporting, data entry, and documentation to reduce bottlenecks, reduce costs, and save time spent on repetitive tasks.
- Automated invoicing and billing to save time and labour costs.
- Streamlined decision-making with the help of insights gained through AI to assess future demand, plan inventory levels, and optimise supply chains to curtail wastage of time and money.
- Agile decision making, based on developing events with real-time data from supply chains, production, and sales efforts.
But often organisations looking to optimise their digital infrastructure do not know where to start. Resource allocation, replacement of legacy systems, setting up integrated data streams, encouraging data systems and convincing stakeholders that adopting digital solutions to effectively combat inflation are challenges that must be successfully navigated if bottom lines are to be kept out of the red.
It’s no longer a case of cost reductions, but rather resource and investment allocations
Now more than ever, it is crucial to deliver and exceed on organisational expectations with a robust digital mindset backed by innovation. Sound digital deflation strategies rely on every cent being spent effectively through improved solution design processes, which is why many organisations seek expert advice on their digital transformation for long-term business resilience.
Webtonic strives to create authentic working relationships with their clients, fostering trust and solving real-world problems with robust software solutions. “Designing and developing digital platform solutions is at our core. Webtonic exists to scale digital strategies to contribute to an economically sustainable future,” says Potgieter.
Investing much-needed cashflow in the face of inflation can be very daunting. However, informed spending on optimising a digital transformation journey is far more productive than reactive spending cuts across the board. If the long-term goal is to thrive and not simply survive then business must innovate bravely, invest smartly and collaborate continuously for a positive ROI.