As a result of the Covid-19 pandemic, the world has accumulated a considerable amount of debt. Numerous industries have survived the pandemic with the help of generous stimulus plans.
As of 30 June 2022, the Commonwealth government's gross debt will amount to approximately $963 billion. This is around 45.1% of GDP. By 30 June 2025, it is expected to increase to $1,199 billion, or around 50% of GDP. Inflation is soaring as a result of all this spending.
The annual inflation rate in Australia surged to 5.1% in Q1 of 2022 from 3.5% in Q4, surpassing market estimates of 4.6%.
As CFOs observe inflation numbers rise month after month, their concerns are increasing as well. Having reached a height unseen for 40 years, they may assume that it will continue to rise.
According to a recent Gartner survey, 74% of CFOs rank profitability as their most important concern. For many organisations, controlling costs instinctively will be the most effective method of reducing inflationary margin pressures. It is not possible to simply spend your way out of inflation by spending more money.
Digital initiatives, however, require a different perspective. An effective digital initiative should result in a long-term deflationary effect on business costs and, in turn, on the price of goods and services.
As a result of investing in technology, we can permanently reduce the cost of doing business. That's what we call digital deflation. Business costs can be reduced by investing in technology rather than scaling back in the face of inflation.
Today, leading digital businesses have lower costs of doing business, providing them with a substantial competitive advantage. Business leaders are looking for ways to reduce costs, but experts agree that businesses should instead leverage technology to get an edge over competitors. As a result of digital innovation, customers are more productive, cost-efficient, and supply chains are more resilient, reducing consumer costs.
To drive value from automation, you need to build value. It is important for CFOs to identify where they can improve work life and value, and then prioritise those opportunities.
Additionally, CFOs must provide staff with tools that automate low-value, mundane tasks to unlock their investment in them. The cost of hiring and retaining talent is driven up by inflation, which is well understood by CFOs.
CFOs should provide an environment where automation, collaboration, easily shared data, and enabling technologies mitigate the costs associated with hiring talent and the manual nature of many tasks. In order to be proactive in automation, you have to understand what your business is all about.
Automation technology allows CFOs to reduce inflationary pressure on their internal cost structures by investing in technology that enables them to deliver value.
The advantages of automation are apparent at any time, but are particularly apparent during times of pressure on costs (e.g., inflation) and the need to maintain levels of capital, liquidity, and profitability. Robots, artificial intelligence, and process mining are game-changing technologies.
By simplifying and reducing manual tasks, operational value is achieved through process improvement and cost reduction.
Strategic value comes from the data, predictive modelling, and strategic insights which enable a CFO and other chief executives to better connect the front and back-office systems.
Streamlining and automating complex operating environments allows for increased profitability and seamless integration of key business and technical systems. Almost any workflow that requires human input or interaction can be automated.
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n the long run, workflow automation will certainly pay off for our current customers, since we have seen between 30 - 70% reductions in their operational costs.
Stephen Maclean is the CEO and founder of Seers Digital, is a passionate thought leader of Emerging Technology. Seers Digital drives IT modernisation in the Public and Private Sector.
