Tag Archives: Brexit
Brexit, Cash Flow, And The Supply Chain
Putting aside the impact Brexit has had on politics, culture, pride, and family, a burning question for businesses is: How will Brexit affect cash flow across critical supply chains? And if Brexit will have an impact on these cash flows, how do I mitigate against a shortfall in the lifeblood of my supply chain that directly impacts my ability to operate?
To explain why there is an impact at all, it’s important to look at how the overall supply chain works across Europe. The EU states’ free-trade agreement means goods can flow between the UK and the other European member states without customs and excise checks, thus there is an economic flow of commerce with a physical flow of goods and materials. The financial supply chain and the physical supply chain are therefore linked. For example, if you cannot receive delivery of your raw materials, then you cannot fulfill your customer orders. If you cannot fulfill your orders, then you cannot submit your invoice and, most importantly, you cannot get paid. Therefore, any disruption to the physical supply chain will quickly place greater demands on working capital requirements.
To understand the scale of the potential challenge, we can take the SAP Ariba Network as a benchmark. SAP Ariba’s B2B platform has buyers and suppliers trading between the UK and the rest of Europe, comprising of billions of pounds in commerce. This means the movement of goods, flowing logically (i.e., orders, invoices, and payments) through the network, the issuance of those invoices, and the resulting payment are dependent on goods and raw materials making it across the channel. A delay to this supply chain can not only have a knock-on effect on the efficiency of just-in-time, consumer demand but also on the ability to manage the receivables and payables of an organization’s cash flow.
So how do we manage this situation if it happens? There are options available, with financing a key underlying tool. Several choices are available:
- Cash-rich companies can help prop up the cash/liquidity shortfall in their supply chain by offering to pay suppliers early or even on purchase order (PO) issuance. Even partial payment at the pre-delivery stage may mean the difference between a key supplier managing through difficulty or facing real financial solvency issues.
- Acquire low-cost lending from banks via PO or invoice financing schemes. Even now, it may make sense to take advantage of buyer supply chain finance (SCF) schemes to build a stockpile of cash to manage through the leaner times ahead of Brexit.
- An alternative is the higher cost receivables financing (factoring) programs that a supplier can enter into with a bank.
- Use a card as a means of payment; although it’s even more expensive, it is a method of early payment against getting cash payment at the end of the invoice term.
- Focus on UK domestic goods for early payments. As there is no disruption between domestic buyers and suppliers, engage with your domestic supply chain to get either early payment agreements or low-cost early payment funding to help shore up the possibility of disrupted cash flows from the European supply chain.
Although all of these have a cost, the stark truth is Brexit (hard, soft, or otherwise) will have some impact on the supply chain and, therefore, create risks and costs to trading partners dependent on UK imports and exports to Europe. The real cost is hard to measure, but SAP Ariba is helping its customers by including options around the above key strategies. Organizations that can get ahead in this respect can secure their supply chains, form stronger partnerships, and outperform competitors by building a different type of partnership based on managed cash-flow risk and working capital needs.
By helping buyers and suppliers get better visibility of the supply chain, a business network can give assurances to buyers on their supplier’s orders, and to suppliers with low-cost funding to fill the shortfall. It also means buyers do not need to make knee-jerk reactions to shift risk onto suppliers without the foresight to see that jeopardizing liquidity in the supply chain actually jeopardizes your business. The old saying goes, “a chain is only as good as its weakest link,” and cash liquidity forms an important part of the strength in that linkage.
To learn more, register today for our Webinar on Managing the Impact of the International Supply Chain on Your Working Capital.
Stocks and Flows, in Brexit and CRM
You could not have picked a better place for a career in the last two decades than CRM. In one way or another it is the heart of the digital disruption (a term I have issues with), or the modernization of business.
CRM was the first front office system to help organize significant staff doing important but far from routinized things for the business. You could rely on back office apps to organize various aspects of production, but the front office was the Wild West before CRM.
The back office had computer-optimized production, printouts and charts tracking everything. Six Sigma and other regimens helped ensure we made the best use of our raw materials and finished products.
Meanwhile, the front office was drowning in data and thirsty for information. Paper files, handwritten lists and Rolodexes were all we had to help manage how a business made money.
Sharing Information
A recent Tom Friedman
column in The New York Times, dissecting why Brexit is not simply a bad idea but a retrograde one, gave all this greater resonance.
Friedman makes the valid point that we no longer live in a world of stocks — physical things we hold onto — but one of flows, or things that depend on information and that change constantly.
All of the digitization of the last two decades, much of it originating in CRM, has made us more oriented toward getting and replenishing information than making and selling products. The existence of subscriptions makes us keenly aware that tomorrow might not be like today. That makes us highly interdependent; we share information rather than hoarding it or products.
Friedman quotes John Hagel, co-leader of Deloitte’s Center for the Edge, saying that over many years, business has been
“organized around stocks of knowledge as the basis for value creation. The key to creating economic value has been to acquire some proprietary knowledge stocks, aggressively protect those knowledge stocks and then efficiently extract the economic value from those knowledge stocks and deliver them to the market. The challenge in a more rapidly changing world is that knowledge stocks depreciate at an accelerating rate. In this kind of world, the key source of economic value shifts from stocks to flows.”
Best Information Wins
Isn’t that what CRM has been enabling? Capturing data, enhancing and cleaning it, and adding to it until there is a pile of actionable information that can be used not just to sell better but to market more accurately and provide timelier service? That’s us.
A while ago, I ran across an article in Harvard Business Review that I will never forget and may never find again since I don’t know the title or who wrote it. No matter. The thesis was that there are no long-term differentiators any more.
Customers and vendors all have access to the same Internet and can find things like competitive financing, enhancements to supply chains, and more customers easily. Everyone competes with everyone, and the winners are usually those with the best information who are able to act with precision and dispatch in the moment.
So rather than having one or more competitive differentiators — better warehouse, supply chains, financing, etc. — we compete on the speed and agility afforded us by our systems. It’s not just in business where you see this agile model holding court. In my mind, you can’t get further from business and profitability than philanthropy, and I see the same things there.
For example, the Salesforce Philanthropy Cloud has adapted the same orientation toward flows to the world of doing good. Perhaps philanthropy is the best example of my thesis, because so many nonprofits exist on shoestrings and have reach that extends only as far as their databases. In modern parlance, perhaps we could say that most philanthropies historically have been stock-bound.
However, a product like Philanthropy Cloud is all about the flows of information. Information flows within the community and to volunteers and donors. It also flows within organizations, as employees and others debate which causes resonate with them and decide how to donate their time and money. In philanthropy, especially, it’s far more important to understand information flows than even the state of a fund raiser.
My Two Bits
In business today we’re all trying to leverage accelerating information flows. CRM got the ball rolling, but the concept overflowed its boundaries a while ago. Today, even in our personal lives, we’re leveraging technology to help us manage the incoming information tide.
Friedman’s column struck me as a double warning because it says succinctly that we have become interdependent. Walling ourselves off nationally from information sources, a la Brexit, or failing to adopt new information-sharing tools in business will lead to the same failure.
The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.
Denis Pombriant is a well-known CRM industry analyst, strategist, writer and speaker. His new book, You Can’t Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there.
Email Denis.
unlike Tricky Dick, you (media) will have Donald Trump to kick around as MISTER BREXIT
The working assumption lately among media and politics watchers is that if Donald Trump loses in November, he’ll follow his true passion: media stardom.
Vanity Fair’s Sarah Ellison reported in June that Trump was already discussing plans for a “mini-media conglomerate” that would presumably leverage the supporters he’s drawn to his presidential candidacy over the past year.
On Wednesday, The New York Times added to the growing speculation about Trump’s post-election agenda. Trump and his son-in-law Jared Kushner, publisher of the New York Observer, “have quietly explored becoming involved with a media holding, either by investing in one or by taking one over,” the Times reported…
Throughout the campaign, Trump has bragged about his social media following, TV ratings and ubiquity on magazine covers, while complaining that the networks are getting rich off his candidacy. Trump’s media obsession was evident in a June interview with The Hollywood Reporter: He appeared stumped by a question about Brexit, just weeks before the vote, yet offered opinions on specific executives at CNN, NBC, CBS, Fox News, Viacom and 21st Century Fox. (Now, of course, Trump is declaring that he’ll one day be known as “Mr. Brexit.”)
Here’s a better move the Clinton campaign made: going out to Utah for a sit-down with the editorial board of the Deseret News. Yes, this was largely driven by the way this unique race has somehow made Utah look like a battleground state. Typically it’s a waste of time for a Democratic nominee to pitch themselves to America’s largest Mormon population, who typically vote very conservatively. But in August 2016, Clinton’s playing with house money, so why not take a shot?
But what I find to be the most appealing part of this play is just getting out in the field and spending time with local newspaper reporters and editors. In the media landscape, these are the people who are most likely to demonstrate substance and sobriety. They’ll be thoughtful, probing and challenging in their own right, but they’ll also be much less likely to find excitement in all the superficial stuff that the cable nets gorge themselves on ― hype and gaffes and lapsus linguae. If Clinton’s campaign is smart, and tailors a local-first media approach to the concerns of these papers’ constituency, the coverage will be sparkling and substantive ― and the campaign will learn more about how people outside of the Acela corridor are living.
www.huffingtonpost.com/…§ion=politics
The Impact of Brexit on UK Professional Services
Posted by Jim Rodgers, Sr. Director, PSA Specialists Team, NetSuite
Brexit has unleashed uncertainty and challenges across the historically robust professional services sector in the UK, ranging from a record 31-year low for the British pound to impacts on labor mobility, cross-border business, taxation and ultimately revenue and profitability.
One thing, however, is certain as the industry confronts a clouded post-Brexit future—more clarity and precision than ever before are needed for professional services organizations that are either based in or do business in the UK.
As it is, many PS firms tolerate some degree of guesswork and process delay in project delivery, client service, resource utilization and financial management. That’s a risky strategy given the uncertainties surrounding Brexit for professional services, and indeed the UK and EU economies at large.
So far, the UK economy has weathered fallout from the June 23 Brexit vote better than some expected. The International Monetary Fund in early October revised previously pessimistic predictions to say the UK will be the fastest-growing G7 industrial country in 2016, though it forecasts low 1.1 percent growth in 2017.
If growth does slow and companies curtail spending, in-country professional services consulting work could diminish. Real or perceived barriers to cross-border work could deter prospective EU clients from engaging a UK consultancy. Some firms have recently seen a spike in work as companies in multiple industries affected by Brexit look to consultancies for guidance, but long-term effects are unknown.
FX and Mobility Concerns
Foreign exchange is a major concern. With the British pound slumping in early October to its lowest mark since 1995, UK-based professional services organizations doing business abroad face a financial hit if fees are paid in a currency other than the pound. Similarly, firms based outside of the UK but serving UK clients face lower net revenue if compensated in the British pound.
Wages and expenses for professional services personnel working outside the UK are another issue. If a consultant works for a London-based firm in, say, France, the organization could face unfavorable exchange rates if the individual is paid in Euros—along with the accounting headache of keeping currency conversions straight.
Cross-border resource flexibility is also a question mark. While “freedom of movement” remains in place, changes could occur as terms of the UK’s exit from the EU are negotiated over the next two years. Conceivably, those changes could affect nationals of EU countries working in the UK, and UK citizens working in EU nations.
It will be years before the economic, regulatory and political dust settles from Britain’s historic vote. Rather than a wait-and-see approach, professional services organizations can take action now withstand potential negative fallout by improving visibility, operational efficiency and client service.
A key transformational strategy is to replace disconnected financial, project management and CRM applications with end-to-end professional services automation software (PSA). Ideally based in the cloud, PSA improves revenue forecasting with real-time insights into key project metrics, automates currency conversions and streamlines resource allocations and project delivery. Integrated PSA capabilities eliminate the costly inefficiency and poor visibility of siloed applications.
With more than 1,500 customers, NetSuite OpenAir is the world’s #1 cloud PSA solution. To learn how NetSuite OpenAir can help you strengthen control in the post-Brexit world, contact us for a complimentary services value assessment.
Machine learning platform minimized Brexit fallout for investors
The U.K.’s Brexit vote was something few prognosticators saw coming prior to the June 23 referendum.
But once the results were in, it was clear the vote to leave the European Union would have a major impact on financial markets. The pound sterling fell in value by 11% two days after the vote, and both the Dow Jones Industrial Average and the London Stock Exchange’s FTSE 100 index lost more than 2% of their total value. This left millions of traders all over the world scrambling to find safer investment positions.
But at least one group of investors was relatively calm, according to Omer Cedar, CEO of Omega Point Research Inc., a New York-based software company that sells analytics tools to help investment managers review their portfolios for risks. Omega Point’s customers saw little change in the value of their investments after the Brexit vote, Cedar said, giving most of the credit to his company’s Spark-based machine learning platform.
The root of the investing success during this tumultuous time was a data-driven strategy fueled by machine learning models that take into account more than 50 economic indicators, including company-specific reports and broader macroeconomic data. The models are part of the Omega Point Portfolio Intelligence Platform, which is built on Databricks’ cloud-based Apache Spark distribution. The Omega Point software utilizes a combination of homegrown machine learning algorithms and prebuilt algorithms from MLlib, Spark’s machine learning library.
Fund administrators, who are the primary users of the software, are able to review potential risks to the portfolios they manage and test different trading strategies to see how various options would affect investment risks. The machine learning platform assesses characteristics of a high-risk environment over time and quantifies that risk for investors. It is sold as a service and customers pay based on how many users need to have access.
There’s no shortage of analytics tools available for supporting this kind of quantitative investing. Omega Point is among a small number of vendors offering advanced portfolio intelligence tools aimed at investment managers — another example is Novus Partners, also based in New York. There also are portfolio managers that specialize entirely in data-driven investing strategies. In fact, the investing community was quicker to pick up on the potential benefits of using data to drive decisions than most other industries, a trend that initially gained some steam in the late 1990s and early 2000s.
The key to making this approach work is being able to look at data from many sources, Cedar said. That gives a fuller picture of the investing environment and picks up on signals that might be missed by predictive models only looking at one or two data sources. Spark makes sense for such a platform, he said, because it can interface with numerous data sources and keep data in-memory, which speeds the time it takes to get meaningful insights from analytics applications.
“Anyone can build one or two characteristics [into a model], but to understand how everything correlates together is more complicated,” Cedar said. “You’re able to pull those [sources] in and have Spark run a massive amount of distributed processes. You’re able to do it in real time, interactively.”
As sophisticated as the machine learning platform is, Cedar said, it did not predict the outcome of the Brexit vote itself, nor will it predict the next world event that shocks financial markets. Instead, he explained, the Omega Point technology seeks to predict only the market risks that may accompany events.
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Neoconservatism: from Brexit to tRump's sheriff's badge
The seriousness comes from how conservatism is proceeding and since men cannot really fake relationships, the intentions are clear.
From new legislation in Texas to ban fetal dismemberment as yet another way of affirming fetal personhood over female health, to the attempts to dual code Jewish bankers in anti-Hillary messages, conservatism of a global, hegemonic sort will continue to dominate political discourse. They may even present themselves as the “rational alternative” to Trumpian authoritarianism.
The greatest cynicism will be for the GOP to run against its POTUS candidate with even greater RWNJ campaigns by appearing to be voices of reason but gaining even greater power regardless of tehDonald’s success/failure.
The real beneficiaries will be neoconservatives in their sober enlightenment who will gain from the resulting conflicts. And are there no work-houses…
We are living with the politics of the fake orgasm.
The leaders of the Brexit campaign are obliged to join in with the ecstasies of their followers. They must let out a few polite yelps of satisfaction. But a week on, it is increasingly clear that theirs is a phony consummation. The earth may have moved – but not for them.
As shown by Boris Johnson’s retreat from the prospect of having to actually govern the new kingdom he did so much to create, it was all a performance. It will not be long before those they embraced – the alienated, the dispossessed – realise that they have been had in more ways than one.
Like the followers of Donald Trump in the US, white working-class Brexit voters are experiencing a new kind of political relationship. These movements may look like the reactionary populism we have seen many times before, but they are profoundly different in one crucial respect.
The old reactionary politics is utterly serious: its leaders really intend to do what they say they will do, and they really mean to reshape systems of government to allow them to do it. When they say they are going to cut out the contagion that is corrupting society – the Jews, the Catholics, the blacks, the communists – they really mean to act on their twisted obsessions, and they have every intention of creating the authoritarian systems that will allow it to happen.
Most Americans are working class people without college educations. If their values and interests are not represented or taken seriously in any think tanks or any scholarly journals or any political party factions, they will find someone to represent them eventually, perhaps a reality TV star. In a crude and demagogic way, Trump is representing a constituency that the original neoconservatives, with their modest social backgrounds and ties to organized labor, once represented in a sober and enlightened way.
In another (2004) article, Michael Lind also wrote [40]
Neoconservatism … originated in the 1970s as a movement of anti-Soviet liberals and social democrats in the tradition of Truman, Kennedy, Johnson, Humphrey and Henry (‘Scoop’) Jackson, many of whom preferred to call themselves ‘paleoliberals.’ [After the end of the Cold War] … many ‘paleoliberals’ drifted back to the Democratic center … Today’s neocons are a shrunken remnant of the original broad neocon coalition. Nevertheless, the origins of their ideology on the left are still apparent. The fact that most of the younger neocons were never on the left is irrelevant; they are the intellectual (and, in the case of William Kristol and John Podhoretz, the literal) heirs of older ex-leftists.
The gaffe: On July 2, Trump tweeted out an image featuring Hillary Clinton’s face over a background of cash, with a six-pointed star reading “Most corrupt candidate ever.” Many people immediately recognized this as an anti-Semitic dogwhistle, as the six-pointed Star of David is a symbol of Judaism. Trump deleted the tweet, then resent the same image with the star changed to a circle.
The defense: Trump argues that it was a sheriff’s badge, or perhaps a “basic” six-pointed star. But a sheriff’s badge wouldn’t make any sense in this context. There’s also the small problem that the image appears to have originated in a neo-Nazi-frequented message board, then traveled to an anti-Semitic Twitter account before being picked up by Trump.
Learning Something CRM-ish From Brexit
This summer has started out to be anything but a somnolent day at the beach. The Brexit vote for the UK to leave the EU is enough to disturb your slumber, and that’s not the only thing on the plate.
To be frank, it appears we are at one of those major historical transition points that might happen a few times in any of our lives. Without being overly dramatic and without stirring up a hornet’s nest of political debate, I would still like to discuss CRM in all of this.
You might think that CRM is the furthest thing from the central issue confronting the unhappy European divorce — and you might be right — but please bear with me. As one who studies the intricacies of the interactions of two species of humans — vendors and customers — I have to say that the incipient breakup looks an awful lot like dissatisfied customers taking agency and leaving the established structures that those in authority have set up. I’ve written two books on this theme and will not try to recount them here, but following are some parallels:
- A customer attrition rate that makes the going concern unable to function properly;
- Bad word of mouth by customers about the vendor leading to rumors and half-truths ricocheting around the installed base and amplifying the problem; and
- A vendor community surprised by the outcome. No one ever thought things were so bad. (This is pretty much what Marie Antoinette was thinking.)
If any of this sounds like the kind of thing you work assiduously to avoid in your job, that’s good. It also signals what’s so CRM-ish about the Brexit vote.
A World Without CRM
The Brexit vote is both a vivid reminder of what life could be like if CRM never happened, and a reflection of how much better things between vendors and their customers are now.
Note, I didn’t say things are perfect between vendors and customers — at least, not yet — but I doubt there are very many people who think things are much worse because of CRM. Let’s just say that at least through making the attempt to reach out to customers through many channels and to understand what’s important to them, the vendor community at large has dodged the bullet that struck Europe in its body politic.
If the British were the only people on Earth unhappy with the EU arrangement, then there would be reason to dismiss them as a bunch of cranks. However, the Brexit vote exposed fault lines in other members of the trading sphere as well. France and the Netherlands are talking openly about their own referenda on leaving the EU for instance.
If CRM had never happened, things might have been marginally better in the UK; at least no one would have been conditioned to think that leaving a vendor could be as simple as voting out and moving on. We see this all the time these days in the subscription business model. Those vendors work like dogs to prevent the revenue losses associated with customer attrition. That’s at a microeconomic level, though, and Brexit is at the macro level, so the fallout is much more severe.
There’s no government outreach to citizens that is similar to CRM. That’s in part because where are citizens going to go? They can vote politicians out of office — but how often do they vote a government out?
Now that Brexit has happened, there’s a new possibility for citizen behavior, and customers — or citizens — have to be listened to in whole new ways. In my humble opinion, this is when CRM becomes an indispensable tool for government. All of the advanced social, mobile, and analytic tools accessible by vendors need to be tailored to governments and citizens. CRM for government changes any democracy from a representative one to a participatory one without even a word change in any constitution. How?
CRM Bonanza
The Brexit referendum was supposed to be nonbinding — and frankly, it would be best if someone remembered that, but it’s now beside the point. If Brexit is nonbinding but politicians are beginning to implement it, then it says quite frankly that any such future vote could be as disruptive. This means that politicians and others involved in government never can get so far out of sync with constituents again.
For CRM vendors, this could be a bonanza, of course. It comes at an especially good time. If the same need for CRM had developed at the turn of the century, implementing services for billions of people would have proven impossible. However, with today’s good, fast cloud computing and a plethora of supporting technologies like analytics, social media and mobile delivery systems, the stage is set for the blooming of very different approaches to living together. Phrases like “What would Watson do?” must be just around the corner.
I was never a fan of Brexit, and the news seems to be full of reports that the winners (the somewhat loyal opposition) had padded their case for leaving with a few stories that were not exactly factual, which is disappointing.
However, I doubt that cigarette can be unsmoked at this point. Had CRM been in place before the vote, the government might have had a chance to steer public opinion. That’s water under the bridge at this point, and the learning from this debacle is that we need to apply the same CRM strategies in government that we’ve honed in business these last 20 years or so.
Denis Pombriant is a well-known CRM industry researcher, strategist, writer and speaker. His new book, You Can’t Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there. He can be reached at denis.pombriant@beagleresearch.com.
Brexit and the Digital Landscape – What Can You Expect?
Thursday 23 June, 2016 is when the UK will vote on ongoing membership within the European Union, with the other option being an exit (Britain + exit = ‘Brexit’). For those of us who can remember the vote to enter the European Economic Community (EEC) or Common Market, it seems that we may have come full circle.
What goes around comes around.
I am not going to predict (yet – keep reading) the outcome of the vote. But the possibility of the UK leaving the EU does raise some interesting questions and issues pertaining to the digital market, and what you should be thinking about regarding compliance and the ongoing operational management of your digital business.
The Internet has provided us with the ‘Digital Common Market’ from an operational perspective, but in terms of legal and compliance considerations there are still many questions that remain. In particular, consider the fact that the EU Data Directive in place now can be interpreted on a local basis – ‘local’ meaning that each country can have their own enforceable variation of the directive as they understand it.
With the upcoming changes and implementation in the General Data Protection Regulation (GDPR), possibly in early 2018, the playing field will be the same (with a few caveats) for all members of the EU. This adoption of one standard for all will only benefit consumers and should eliminate any operational confusion for vendors.
So let’s fast forward the clock to 24 June 2016 and assume that the UK has voted to leave the EU. What happens next?
Well, the good news is that there are already existing Data Protections for UK citizens, and also many other resources that can provide guidance pertaining to your operational and consumer commitments;
The Data Protection Act 0f 1998: http://www.legislation.gov.uk/ukpga/1998/29/contents
The Information Commissioners Office: https://ico.org.uk/
The Direct Marketing Association: http://www.dma.org.uk/
We are now more than ever globally connected in this digital marketplace and I predict that the vote will be to stay in EU, which will mean that if you do business in the EU regardless where your business is located, you will need to start to understand the implications of the GDPR and how this will affect you operationally.
Here’s a great guide from the ICO on preparing for the GDPR: Preparing for the General Data Protection Regulation (GDPR) 12 steps to take now, and here’s an image from the ICO outlining the 12 steps discussed in the report.