After another year of increasing costs and continued supply chain issues, businesses have become accustomed to operating in an ever-changing economic landscape.
While many are looking ahead to the fresh opportunity that a new year brings, business growth may be harder to find in 2024. Instead, with elevated interest rates and higher energy prices on the horizon, the majority of businesses will be looking to create new ways to be efficient and extract maximum value from every pound spent.
Linked to this increasing drive for efficiency is the rise of Artificial Intelligence (AI). After hitting the mainstream in 2023, growing businesses are looking at how AI can help them automate, gain new strategic insights, and supercharge their operations.
Here, Nicky Tozer, SVP, EMEA, Oracle NetSuite details the top five ways businesses can drive efficiency and productivity in 2024:
By doing more with less
Economic circumstances continue to squeeze profit margins and create operating difficulties for businesses. In 2024, increasing efficiency and boosting productivity will be critical to success. Business leaders can only manage what they can measure, and success in the next year will undoubtedly require management to know their numbers – from performance metrics to supply chain data – which will be the key to finding ways to do more with less.
Achieving this will require robust data integration, and automation of manual processes, across internal teams like finance, sales, and operations. There is a strong case to be made for boosting productivity, regardless of the current business landscape. The International Monetary Fund highlights the link between improved productivity in Europe and overcoming short-term financial pressures, while research has shown maintaining just a 1% annual improvement in SME productivity over five years could grow advanced economies like the UK economy by £94 billion.
By cautiously tackling AI FOMO (fear of missing out)
As the potential gains afforded by AI mature in the year ahead, many will look to embedded and generative AI in their business management system to help increase user productivity, reduce costs, harness the power of their own data, and improve overall efficiency. AI should be used to advise and assist. By combining AI with finance and operational data, web analytics, lead-generation data and customer satisfaction metrics, businesses could uncover unique trends to unlock new insights or develop strategies to build their audience.
But SMEs must taper their enthusiasm to adopt AI at any cost. They must consider how connected their data is, ensuring that it draws on information from across lines of business. AI is only as good as the data it is trained on, highlighting the continued importance of having business information that is integrated and relevant across departments.
By solving the software hairball
Connected to doing more with less is solving the ‘software hairball’. We’re in a period of steady convergence, with manufacturers, retailers, and service companies more commonly becoming all-in-one platforms – leading to complicated ‘hairball’ scenarios whereby companies inherit five pieces of software for five different outcomes. However, this hairball adds complexity. Data may be siloed or require complex integration processes, while also eating into budgets and draining the internal resources required to manage multiple vendor technologies.
Businesses require simplicity, and the ability to create connections across processes and lines of business. In 2024, visibility of real-time, reliable data will be vital to enable proactive action. By adopting one integrated system, businesses can bring together data from across functions such as finance, inventory, and supply chain under a single view to help maximise return on investment, deepen customer relationships, and spark investment in future growth.
By putting ESG higher up the business agenda
Business leaders no longer look at environmental, social, and governance (ESG) metrics as something that only pertains to big companies. Small and mid-sized, fast-growing businesses also must chart a strategy for ESG success.
Investors, customers, and employees all increasingly favour businesses with clear goals and real progress around ESG, especially environmental sustainability. Regulation is also a driving force, with the Corporate Sustainability Reporting Directive (CSRD) requiring larger enterprises and listed SMEs to report across several areas of ESG in 2024.
More robust regulations increase the need for greater tools and measures to support compliance. Systems that go beyond basic financial and managerial reporting to include specific and non-financial metrics such as capturing carbon emissions and plastic usage, will be especially pertinent. In 2024, ESG success will be key to attracting conscious consumers, recruiting in-demand talent, as well as increasing revenue while mitigating risk – all of which will be intricately connected.
By harnessing Industry 4.0
After years of promise, Industry 4.0, smart manufacturing and smart warehousing are gaining traction and forecast to grow significantly, according to the Global Smart Manufacturing Market Report 2023. Having historically been dominated by larger international organisations, advancements in automation, robotics, and AI are making Industry 4.0 a more realistic goal for growing manufacturers and logistics companies.
Smart tools and connected systems can sense and interact with the real world and provide predictions that can allow organisations to benefit from improved productivity. It can also improve operational efficiency by minimising – or entirely preventing – sudden shutdowns of manufacturing facilities or limiting the disruptions when supply chains face bottlenecks. Recognising these advantages, businesses across industries will become more digital to create new, innovative, and competitive business models. Data is the glue for bringing together the processes that make Industry 4.0 a reality. In 2024, growing manufacturers should look to integrated business systems that enable flexible planning, enhanced control, and deep analysis of supply chain data.
Read more:
Five Ways UK Businesses Can Maximise Success in 2024