How to Effectively Manage Business Uncertainty

One thing that is always a certainty in business is change, and how you manage uncertainty in changing economic climates can be the presiding factor in your business thriving, surviving or dying.

Perhaps the most effective method of managing uncertainty is by reducing the levels of internal uncertainty. You’re more likely to succeed by managing things that you can control – having greater visibility, accurate information and meaningful scenario planning effectively reduces guesswork. External forces such as rising costs of materials, interest rates, falls in demand, staff shortages and lack of investment cannot be fully controlled, so it’s best not to focus on managing these issues.

We recommend asking yourself these three questions:

• What can you see right now?
• What can you control right now?
• How can you be agile to change now?

Look to your business management systems to help answer these questions. Do they provide the visibility, control and agility needed to manage any uncertainty? Having technology that accurately answers these questions makes managing uncertainty much easier.

Our partners at Oracle NetSuite published a whitepaper at the beginning of the COVID19 pandemic which remains appropriate to this current climate, illustrating the importance of reducing uncertainty by focusing your attention to visibility, process, performance, people and agility.

Visibility

Taking stock of your resources on hand, pending liabilities and outstanding receivables will enable you to make a best guess estimate of how much cash you’ll need to sustain operations for various timeframes. With accurate, up-to-date financial data and ‘what if’ scenarios in hand, you can determine what steps you need to take.

Process

With uncertain periods, the focus may need to be shifted from typical long-term strategies to immediate priorities such as how to cut costs and maintain liquidity. These short-term priorities should be communicated throughout the business for them to understand what needs to be achieved and why.

Reducing inefficiencies to contain costs is paramount during a downturn, therefore improving poor processes and automating manual tasks can soothe cash flow concerns in the short term and prepare the business for growth in the long term.

Performance

Monitoring key performance indicators (KPIs) is especially beneficial during economic uncertainty. Most importantly, measuring KPIs using real-time data gives you a real insight into current performance and inefficiencies – using standard monthly or weekly reports doesn’t give you warnings early enough in uncertain times. Measuring accurate information allows you to make quicker, well-informed decisions and manage any uncertainty as it happens.

People

Downturns and crises can easily destabilise employees and reduce their productivity. Keeping them informed, even when it’s not positive news, can stifle any rumours and reduce staff concerns and turnover. Losing experienced team members can make a bad situation worse and ensuring staff engagement is positive should minimise any chances of that.

Agility

While crises are tough, they’re not permanent. Being prepared for the downturns enables you to be in a better position for growth when the opportunities arise. Creativity with new revenue streams, rethinking price strategies, filling skill gaps and looking to new technologies are all approaches which will make your business more agile.

NetSuite

While most of the above are possible to do manually, systems like NetSuite provide the infrastructure and processes to make it second nature. During the pandemic, we had customers tell us that they have no idea how they would have coped without their NetSuite system. They couldn’t have manoeuvred their way through the crisis if they’d not been on the fully cloud-based solution, accessible from anywhere and providing them with real-time visibility across not only their financials but other key functions, and making their scenario planning not only more meaningful, but much quicker.

As well as those customers that managed their way through a downturn, there were those that had the opposite ‘issue’, and NetSuite supported them to adapt to the new priorities and levels of transactions. Customers including:

• DeliverNet – supporting the care home sector with crucial supplies
• Skanwear – their PPE being more in demand than ever
• BioClad – supplying hygienic wall cladding to Nightingale hospitals across the UK
• LoganAir – supporting the air ambulance service and providing essential air transport for key workers
• WiFi SPARK – delivering a solution the help hospital patients virtually visit loved ones during lockdown.

External headwinds can cause uncertainty for any business, but effectively managing any internal uncertainties should place you in a strong position to adapt to these headwinds when they occur. We recommend reading the whitepaper from NetSuite on Managing Business Uncertainty which provides their three-step solution with checklists of what’s needed for each step to guide you.

If you’re interested in getting a free, tailored demonstration of how NetSuite can make your business become more adaptable to change, get in touch with richard.christie@eurekasolutions.co.uk or call 01355 581960.