Economic and policy uncertainty
With tighter financial conditions in 2019 and tense political logjams across the US, Europe, and Asia, we’ll see more economic and policy uncertainty, and as a result, less predictable revenue growth opportunities. However, this will provide a great incentive for companies to maintain profitability by looking inward and becoming more agile, modern, and efficient at managing their business spend to ensure every investment the company makes drives shareholder return.
Compliance to take centrestage
Following high-profile fraud cases in 2018, and the issues around compliant workers brought on by Brexit, UK firms are expected to take great strides this coming year to tackle the demons that lay within. This will be done by implementing technologies that will give them a comprehensive view into all their business spend to ensure compliance, financial security, and safeguarding against fraudulent accounting. Businesses are rushing to get their arms around spending, which will protect against internal factors currently, but also the uncertainty ahead.
AI and ML to form the core of business insights
AI and machine learning will continue to drive valuable business insights. When applied to how companies manage their money, insights around where and when to spend, compliance, and risk management can be gleaned. When considering what technology investments to make in 2019, it will be important for businesses to understand how the convergence of AI, machine learning, and big data is creating powerful ‘community intelligence.’ We will have new opportunities to ascertain value from data in ways we weren’t able to before and AI will have an immense impact on how companies manage their bottom line.
Plan for better spending
Because of changing domestic policies and international trade agreements in 2019, companies who’ve globalised and become truly multinational will be at greater risk for being out of compliance when it comes to sourcing, procurement, and payments. It’s easy to forget things like FCPA penalties, new trade restrictions, or examining the cost of compliance when you’re trying to make smarter spending decisions next year. Without proper visibility into what you’re spending, compliance will always be a significant risk. Achieving true financial compliance requires centralised control with decentralised execution to yield informed purchasing efficiency, while providing financial oversight and auditability.
Suppliers to bear the brunt of longer payment times
Payment terms to suppliers around the world have been getting longer in the past decade since the financial crisis, and as we inch closer to a bear market, we’ll see payment times to suppliers get even longer. This will create even more risk if businesses don’t address payment issues, making them simpler, more flexible, and exploring options like supply chain finance as part of an overall business spend management strategy. The quarter-point hike to the committee’s benchmark rate target is even more reason for businesses to understand why frugality and seeking ways to spend smarter will need to be an essential part of any company’s culture.
Strategic hiring and compensation
As policies around salary increases, paid leave, and worktime flexibility are debated, businesses will be evaluating how they hire, staff, and pay their employees in a much more dynamic and strategic way. Contingent workforces and the gig economy will play an even greater role in these strategic hiring and compensation decisions. Businesses will need to develop better plans for how they can most effectively onboard contingent workers and how they will impact the bottom line.
Immigration core to employment policies
From the Trump administration’s policies on immigration, to Brexit’s labour consequences, to arguments in Asia over the wages and rights of migrant workers, we’ll see more companies banding together and taking the lead on such issues, with cohesive platforms on immigration reform. This, in turn, will put more pressure on governments to pass major immigration legislation and embrace policies that consider the inherent value immigrants bring to businesses and society at large.