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In the 2022 Forrester/Dun & Bradsheet study of over 260 decision-makers across the UK, US and Canada, four out of five (97%) respondents stated that their company’s current ESG strategy created a significant or transformational increase in revenue. In comparison, 81% of participants said their company had experienced negative consequences by failing to meet their ESG goals, the most common being increased operational risk (43%) and increased financial risk (38%).

With an increased drive towards sustainability and reaching global net-zero goals, companies must find the right balance of investing in their ESG strategy to drive long-term value, against short-term economic turmoil.

The business case for ESG

It’s crucial that companies recognise the direct value of focusing on ESG in their markets. In order to tackle material environmental and social issues, companies need to scale up their investments supporting these areas. This requires a clear understanding of not only the environmental and social benefits but also the associated financial benefits.

For instance, the NYU Stern Center for Sustainable Business examined the relationship between ESG and financial performance in more than 1,000 research papers from 2015 to 2020. They found that companies were 76% more likely to experience a positive or neutral correlation between a long-term focus on ESG and improved financial performance.

ESG helps illustrate where companies’ expenses are going and where they can improve their resource efficiency. In relation to identifying operational inefficiencies, companies can use ESG-related data to see where they may be spending more money than necessary to clean up their pollution and waste. They can then look into more cost-saving waste reduction strategies. Additionally, many businesses may have untapped financial benefits of ESG strategies that they’re currently not tracking such as avoided cost, where ESG-related data can help identify instances where less money is needed to be spent.

Access to consumers can also be dependent on how companies are demonstrating their ESG efforts. In fact, a 2021 PwC ESG consumer intelligence study revealed that globally 57% of consumers say companies should be doing more to advance environmental issues (e.g., climate change and water stress), 48% want companies to show more progress on social issues (e.g., D&I and data security and privacy) and 54% expect more from companies on governance issues (e.g., complying with laws and regulation and addressing widening pay gap). As a result, ESG reports that successfully meet customer standards can improve the chances of both retaining existing customers and expanding customer base.

Employees are also increasingly concerned about their employers' ESG efforts. For example, a 2020 Reuters survey of workplace culture found that of 2,000 UK office workers, 72% of multigenerational respondents expressed they were concerned about environmental ethics, while 83% of workers said their workplaces were not doing enough to address climate change. With there being significant costs associated with recruiting and retaining talent, it’s important that as with consumers, companies put the effort in meeting employee standards.

Focus on material ESG issues

Companies may be tempted to cover the universe of ESG issues, but this is not the best approach. Instead, they should understand which ESG issues are likely to have a substantial impact on enterprise value and finances of the company as well as the demand for its presence from stakeholders (i.e., material ESG issues).

ESG issues, such as business ethics, greenhouse gas emissions and community relations can be dependent on a company's sector, size, geographic location, among other factors and so it is important that executives understand which areas make the most sense to put their focus and resources into. For example, a company within the oil and gas industry will be focused on methane emissions while a company within the technology industry will not.

Understanding what the material ESG issues for a company are, begins with conducting an ESG materiality assessment. This is where companies can gain input from a broad range of stakeholders as to which ESG issues matter most -or are material. After gaining this input, and understanding connectivity to financial data, the company should obtain consensus with a cross-functional committee of leaders, management and the board.

There is greater value in focusing on doing the best work when it comes to material issues and related performances that matter most to a company and its stakeholders, as opposed to simply doing an okay job at everything. A study from Mozaffar Khan found companies focused on material issues would have a 6% outperformance on stock prices while those that focused on immaterial ESG issues or no ESG issues at all would underperform the market by -2.6%. Overall, it’s in the company's best interest to focus on material ESG improvement.

Data transparency and one source of truth

While ESG can allow businesses to identify cost-saving avenues, they need the right data to provide insights and help inform their decision on new opportunities. The future of ESG reporting will enable connectivity to financials and help companies calculate the impact of ESG efforts as opposed to merely reporting metrics.

To achieve this, companies can harness cloud-based technologies, providing a single source of truth for all financial and non-financial data. This means the data collection and reporting takes place within one central location, where everyone can collaborate in real-time in the same workspace with everything tracked, and everything linked between financial and non-financial.

In fact, Workiva’s 2022 survey found that globally, three out of four respondents expressed that technology was important for compiling and collaborating on ESG data, as well as validating data for accuracy (80%) as well as mapping disclosures to regulations and framework standards (85%).

Propelling ESG reporting into a transparent, innovation-friendly, actionable and dynamic environment will streamline the steps needed for a company to make informed decisions.

Nothing happens in a vacuum

Currently, the recession, geopolitical conflicts and other factors are taking place alongside ESG. This is why it is important that companies effectively weigh where priorities should lay to successfully navigate through uncertainty.

Dedicating efforts to ESG enables a greater understanding of risk and opportunities that can be cost-saving and opportunity-generating. Even amongst economic turmoil, businesses will need to continue to walk the talk when it comes to climate commitments, advancing social issues and addressing corporate governance.

Through effective ESG reporting, having one source of truth will bring together the financial and non-financial data to best inform decisions. With clear and transparent insight across the company, the particular ESG issues that are most fitting can be determined, and this will support in standing up to both existing and future scrutiny.

Mark Mellen is the Director of ESG Enablement at Workiva, the world’s leading platform for integrated regulatory, financial, and ESG reporting. Workiva simplifies complex reporting and disclosure challenges by streamlining processes and connecting data and teams. Learn more at workiva.com.

The cost of doing business is already rising – and we expect this to continue into 2023 as businesses enter a period of consolidation and cost-cutting to combat rising inflation and expenses. In tandem, the customer base will shrink as spending is scaled back.

Planning for this uncertainty is not easy. But as we step into the next year, agility will be key. Those that are able to react and adapt to new challenges and create a sustainable economic model for growth will be best equipped to survive. Crucially, taking advantage of the fintech and payments industry to maximise efficiency, cut costs and navigate changing regulations will be highly beneficial in creating a competitive edge.

Here are my predictions on how businesses will benefit from payment innovation and expertise in 2023 to combat economic uncertainty:

  1. Cost-cutting efforts will push business towards payment solutions that facilitate speed of delivery and overall efficiency.

Inflation is the silent killer of businesses and personal wealth. That is why heading into 2023, in this period of economic volatility, businesses will be forced to take a step back and consider how they combat fluctuating costs while streamlining operations and responding to customer demand for reliability and speed of delivery.

We’ve already seen the Bank of England’s efforts to support businesses by raising interest rates, but next year, businesses will look towards the payments industry for more help. So much so, that businesses will increasingly adopt modern payment tools to build speed and efficiency into cross-border products and services – helping to manage liquidity with instant settlement, keep customers happy, unlock new revenue streams and offset inflationary pressures. By increasing the speed of cross-border products and services, businesses can ensure they reliably pay and get paid in real-time, every time.

Fundamentally, those who can modernise their processes successfully will be better equipped to survive this uncertain time with stable and reliable finances.

  1. Payment provider innovation will allow businesses to accelerate their global ambitions.

Many, if not all, businesses aspire to operate globally – taking advantage of talent, market appetite, and regulatory opportunities around the world. However, international expansion is often part of the long-term roadmap – a goal that follows funding, momentum objectives, or customer acquisition.

But today’s economic challenges will see businesses accelerate these global ambitions in the relentless pursuit of growth. Opportunities to expand their customer base and drive new revenue streams become harder to ignore when combatting inflationary challenges and squeezed budgets.

As businesses adopt this global mindset, they will increasingly lean on payment providers as a reliable and flexible financial bridge into these new markets. With this support, businesses of all sizes will feel equal to larger enterprises, both in terms of resources and market opportunities. Unlike ever before, they will be able to leverage the same payment infrastructure to receive and send money in local currencies, at low exchange rates and in real-time. In turn, this will build trust with new markets and mitigate the effects of economic uncertainty.  

  1. As regulatory challenges persist, businesses will look for partners to remove the headache. 

In 2023, businesses will become increasingly attuned to the complexity of changing global regulations. It’s here that payment providers will play a key role in removing compliance as a hurdle to international growth, customer acquisition or revenue generation.

Fundamentally, leaders want to spend their time focused on business growth, product development and customer experience. And so, managing different regulatory environments can quickly become burdensome and costly. Many do not factor into their roadmap that each market may require a new license to move money or different compliance standards for onboarding customers and verifying identities.

As being compliant and adhering to regulations is of utmost importance, it can ultimately draw attention away from more strategic endeavours that lead to growth. This means that as budgets are squeezed in 2023, businesses will want to ensure time and resources are spent on what will help, not hinder, the bottom line. The right payments partner will remove this headache, managing global regulatory compliance needs and requirements in real-time, so crucial resources and budgets are available to be allocated to growth.

Final words

Navigating uncertainty next year will require a considered approach. Businesses will need to consolidate both to drive efficiency gains but also to hone in on the most productive parts of the business. For many, payments industry innovation and technology will be key differentiator in mitigating economic uncertainty. The need to streamline the business, facilitate speed and reliability in payments and remain regulatory compliant under new frameworks will all push businesses toward payment providers. It’ll be these partnerships that will help businesses unlock growth opportunities and offset 2023’s cost pressures.

It’s not just employers who are feeling anxious. With unemployment rates forecast to rise to 6.5% by 2025, many employees will be worrying about job security, against a backdrop of the cost of living crisis and rising interest rates. 

All of this does not make for a happy workplace. But over the years I’ve learned some important lessons about how employers can navigate choppy waters, conduct scenario planning, and cut costs without causing upset among their teams. Here are five key principles that business leaders should keep in mind.

  1. Be directionally right — not precisely wrong

Obsessing over minor savings in every area of your operation could mean that you ignore the bigger picture. You should take the same approach as a physicist — think about orders of magnitude and start with a high-level view rather than going granular straight away.

With this outlook, you can perform sanity checks on a regular basis and not get sucked into the trap of fine-tuning every number to the second decimal. Putting everything under a microscope is a waste of time if the big numbers still don’t add up. Remember what your ultimate goal is and make sure you take big strides towards it — not baby steps.

  1. Cash (management) is king

Developing knowledge around the principles of cash management within any organisation is a good idea whether times are hard or not. While business leaders are often skilled in understanding and manipulating profit and loss, they often don’t know the ins and outs of cash management and cash flow.

Making cuts across the board is never the right approach. Fat is always distributed unequally in businesses, so a surgical approach is required. Cut spending in some areas, while investing in others that will help you to grow more muscle. In an ideal world, you’ll cut out all of the things that don’t work, and further invest in all of the things that do.

  1. Keep it simple

Sophisticated business models with high levels of functionality and reams of features often aren’t suited to tough economic circumstances. Think about what it is that your customers really need at this time and focus on that part of your offering, and leave the bells and whistles for another day.

In my experience, building a simplified business model can be more difficult than building one with high levels of complexity; but remember to focus on the larger orders of magnitude as you will have very little margin of error when the recession starts to bite.

  1. Keep providing the good coffee

You won’t make major savings by switching to a cheaper brand of coffee, but you will undermine staff morale. Not just because staff will waste time complaining to each other about the standard of the new brand, but they’ll also go out in search of decent coffee — time that a happy employee would otherwise be spending productively.

It’s not just the coffee that you need to preserve; think carefully about cutting back on employee perks. If you need to make cutbacks, consider the biggest cost buckets first. No negotiation is taboo, even rent. Could you make savings by moving your team into a smaller office? I’ve seen facilities teams perform miracles in optimising office space.

  1. Celebrate your victories

Making sure everyone gets a pat on the back when the business has hit KPIs and significant milestones is essential for boosting morale. Take time to show everyone that their efforts are appreciated and give them an opportunity to let their hair down and share in the glory of their collective efforts.

When times are tough, it’s important to ensure you focus on achievable goals. Revenue growth might not be possible, but growing market share may very well be realistic. When the turnaround comes, you’ll have a team of happy, motivated people hungry for more success, putting you in a great position to reap the rewards.

In an economic downturn, technology can help with financial planning and forecasting, but there’s no crystal ball. Stakeholder management and communication are therefore key in these times. Be honest with your team and be absolutely clear about what you are trying to achieve.

Cost-cutting is often necessary in the face of recession, but businesses shouldn’t cut back on spending which will negatively impact staff or the offerings of the company. By taking a simplified approach, focusing on the things that really matter and ensuring staff morale is high, businesses can put themselves in the best position to weather the economic storm.

However, these institutions have long been dubbed laggards when it comes to technology, innovation, and the speed at which they can digitally transform. Much of this is due to the legacy infrastructure in place, the regulatory landscape in which they operate, and security and governance protocols they have been hamstrung by. This means that data is not driving the valuable innovation it can do to improve automation, decision-making and risk management.

In comes synthetic data. This is not ‘real’ data created naturally through real-world events. It is ‘artificial’ data that maintains the same statistical properties as ‘real’ data, generated using algorithms. Whether the aim is to make data available across an organisation or accessible to third-party partners it drives speed to innovation within financial services.

This is already happening as the first banks start to roll out synthetic data across various use cases, from testing to AI model training to cloud migration projects. But in 2023, I believe the sector will open its eyes to the notion of synthetic data and how it can fuel growth, support overcoming longstanding obstacles, and totally rejuvenate the way financial services institutions meet and exceed the ever-evolving requirements of customers and regulators.

Revolutionising data privacy 

According to Gartner, synthetic data will enable organisations to avoid 70% of privacy violation sanctions. Financial data, such as consumer transaction records, account payments, or trading data, is sensitive personal data subject to data protection obligations and is often commercially sensitive.

Structured synthetic data has the potential to revolutionise the way financial institutions use data securely. Because this data preserves the statistical properties of real-life data, the strict privacy and security protocols that have previously blocked innovation can now be navigated with synthetic data. So, because no real individuals can be identified from the synthetic data, data protection obligations, such as GDPR, do not apply. This will undoubtedly be top of mind in 2023 for business leaders, with the fifth anniversary of GDPR in May.

Since privacy compliance and information security regulations will no longer be an issue, the new artificially generated data can then be used to create new revenue streams. The banking sector can take their Open Data and data monetisation strategy even further in 2023 since synthetic data will enable them to package this data and sell it to third parties without the need for express consent.

Seamless cloud migration

There’s no doubt that the organisations that are succeeding in these trying times are those that can rapidly scale via the hybrid or public cloud. But well-regulated industries like banking and financial services have been reluctant to go all-in with the cloud. I get it. As soon as data leaves the company campus and servers, the control is lost. Synthetic data allows for a rapid, cross-organisational migration to the cloud without any of the added risks. Something that financial organisations can use to great effect in 2023.

Instead of pseudo-anonymised data (created by traditional processes such as masking and anonymisation) that can still lead to re-identification or redacted data that loses most of its utility, with synthetic data generation, the dataset is totally new and holds no ties to the original. If used, in 2023, financial services can train on their real datasets on-premise – even behind the walls of separate departmental silos. Then, the artificial data can be released into the cloud. And since there’s no personal information in it, the synthetic data can be shared across silos within the organisation — allowing for cross-organisational strategy, insights and analytics like never before.

The commercial impact of generative AI

Generative AI underwent a huge step change in the latter half of 2022. Teams from OpenAI through to StabilityAI have been creating models that can conjure hyper-realistic text and images from seemingly thin air with very minimal verbal prompts. The realism of the responses you can get from these models is in some cases quite creepy and like nothing we’ve seen prior to this year.

So how will this development impact business and society? The jury is still out, but what we do know is that these teams are making these models available for anyone to play with for free right now creating the perfect test ecosystem for developers, hackers and anyone who’s curious to test their ideas.

I am certain that in 2023 we will start to see businesses forming around these tools. For example, there are already examples of text or formula auto-completion tools being embedded into Microsoft Office software that could greatly improve productivity and speed up learning curves of users. These types of efficiency-improving tools have the potential to impact businesses much further afield than just financial services.

There are certainly some concerns and legal challenges that still need to be overcome before this technology can be commercialised. Who owns the output of one of a code auto-completion model if it was trained on data under different licences? Who owns the copyright to images generated from a model?

Despite these challenges, there is huge potential in this technology, and I believe we will all be hearing much more about it in 2023.

As shoppers redefine the traditional shopping experience with more shoppers than ever checking out online and in-app, it’s never been more difficult to predict where your consumer is going to head to the checkout. For example, shoppers may initially see a product that they love in-store, then add that product to their online basket, abandon the cart and then revisit the purchase after seeing an ad on social media the next month. 

There’s no longer a one-size-fits-all approach to product purchasing. Different consumers purchase products in different ways and as such, have different expectations around the shopping experience– both in-store and online. To convert sales, luxury brands need to meet and surpass these expectations, particularly when it comes to payments. 

Seamless payments drive luxury purchases, particularly when it comes to overseas growth and younger shoppers. So, here’s how luxury brands can create a luxury payments ecosystem to amplify business models, unify the customer experience and drive sales. 

Seamless sales

When paying for a premium product, consumers expect a premium experience. In-store, that experience might include getting a fancy product bag or a glass of fizz when browsing the store. Whereas online, creating that feeling of luxury is slightly more difficult – with payments playing a bigger role than you’d think.

The checkout process should be seamless and quick and anything else becomes a barrier to conversion and may cause luxury shoppers to abandon their carts. An example of this could be complicated authentication checks and slow server response times.

Fraud

Another key element of the online customer experience is the mitigation of fraud.  With more money on the line for consumers, brands that don’t embed double-shield protection, rules and criteria into their payment processes, risk not only the sale but the customers' overall brand loyalty – one of the key drivers for sales in luxury.

Historically, luxury brands have worked hard to address payment friction. Many brands have entered partnerships with a variety of payment methods, for example, Klarna, to offer customers a premium, seamless and simple, purchase experience.

The problem with this is time. The reconciliation of collecting each partner's bespoke payment data (i.e., sales volumes, VAT, purchaser demographics) and then bringing that data together in a meaningful way, is a significant undertaking taking a huge amount of capacity. One that many businesses will, mistakenly, skip when revenue is flowing in.

A bespoke shopper experience 

To create a bespoke shopping experience aligned with the target audience, retailers need to first understand their customer: where in the world they’re based, how they like to shop, their payment preferences, the time of day when they are most likely to make a sale. To easily capture these insights, brands should partner with a merchant acquirer that offers a dashboard of data. The dashboard should provide live insights which instantly allow businesses to identify trends, fraudulent patterns and customers' payment preferences. Leveraging these insights, brands can go on to create the perfect personalised payment experience.

Again, the most important thing for luxury shoppers is a smooth shopping experience, regardless of the brand touchpoint. Whether the consumer is shopping on their mobile, tablet, or in-store via a virtual check-out, the process needs to be consistent and quick.

An easy solution to streamline the process across all digital platforms is securely saving card details. After the first purchase, the customer’s card can be immediately tokenised, protecting them from unauthorised access and fraud. Once stored on file, the card can be used for one-click payments, enabling customers to check out in moments, rather than minutes. The payment process becomes premium and the bespoke shopping experience is improved.

In addition, it’s important to align the payment options available to the wants and needs of the consumer. From open banking to buy now pay later, the diversification of payment methods is allowing brands to target an entirely new consumer.

For example, a luxury retail brand targeting Gen Z and Millennial shoppers may look to offer Buy Now Pay Later (BNPL) at checkout. With BNPL, luxury products have become more accessible to those who want to purchase the products they love while paying in a way which works for them. Consumers can finance their purchases in part and pay off the remaining balance instalments giving them better control over their money. When targeting more established consumers, brands might look to offer other well-known and trusted forms of payment like traditional debit cards.  The point is the target audience has huge implications on the payment method and retailers need to know their customer, to know what payments to offer.

Payments for innovation and expansion

Luxury retailers are often at the front of innovation. From Gucci and Louis Vuitton being among the first to have a presence in the Metaverse to redefined high street shopping experiences by providing digital hanging room backdrops, luxury continues to spearhead the retail sector into new horizons. Yet, many brands often overlook the role that payments play in innovation and expansions.

When looking to expand operations overseas, one of the most crucial steps is the ability to receive and send money in different currencies. Merchant acquirers are enabling brands to make cross-border payments simple and seamless, aligning the payment types to the preferences in that market. Overseas, payment options massively vary and it’s important again, to offer payment options aligned to your customers.

Getting payments right holds huge opportunities for building a brand and the most vulnerable part of a brand's interaction with the customers is the checkout. A solid, safe and seamless payment experience leaves the customer with an impression of trustworthiness, whereas a bad payment experience will prevent a shopper from returning, despite the products.

Finally on innovation, when leveraged strategically, payments can be optimised to improve credit card processing, increasing revenue. With the cost of living rising, financial margins are set to become significantly tighter for businesses of all sizes in all sectors. Streamlining back-end payments processes hold huge revenue opportunities for businesses – preventing fraud and saving countless hours on admin - alleviating some of the financial pressures faced, building business resilience.

Adopting an entirely new method of managing payments is always going to be a significant undertaking for an organisation, but it’s so important to get payments right the first time. Seamless payments are expected for premium products, holding opportunities for the business to grow and build customer loyalty. Now’s the time to build a resilient check-out experience, suited to the modern shopper.

As a set of technologies based on edge computing infrastructure and 5G or high-speed connectivity, it is rapidly becoming a reality with many real-world implementations. Statista estimates global IoT spending will hit 1.1 trillion dollars this year, predicting the number of IoT devices worldwide will shoot up from 13 billion currently, to more than 29 billion in 2030.  

Since it is based on “things”, its direct impact on the day-to-day work of senior management or finance departments may seem remote. But IoT can sustain AI (Artificial Intelligence) and machine learning (ML) applications handling multitudes of data flowing from many types of sensors and devices, even when mobile. It opens up huge opportunities for everyone, whether supplying or using services.

For senior finance professionals, IoT provides dramatic new access to real-time data insights from every area of an enterprise. It delivers a level of transparency, immediacy and confidence unobtainable by any other means. This will transform asset utilisation and inventory management, no matter how large or dispersed the organisation is. Edge computing infrastructure ensures the old geographical barriers to the processing of data in remote locations no longer apply, democratising the use of advanced AI and ML tools.

On a more mundane level, finance departments will find record-keeping and reporting to become far more automated and efficient. Able to monitor and analyse data from sensors in almost every nook and cranny of the business, treasurers will, gain a much firmer grip on cost and performance, able to access a huge wealth of data at any level of detail.

With access to analytics solutions made possible by edge computing, organisations can react far more swiftly to events and opportunities. They can employ predictive and prescriptive analytics to extract critical insights from detailed information about inventory, specific financial flows, facilities, business units or assets.

Wider applications across insurance

In insurance and commercial banking, the ability of edge platforms to process and transmit data from 5G-enabled devices are likely to have a significant positive impact on the quality and speed of policy and credit approvals, providing accurate, verifiable data on everything from vehicle usage to agricultural, factory or mining outputs.

Telemetry is already well-established in the vehicle insurance sector and is certain to expand. With access to IoT data streams and the infrastructure to subject all this real-time information to advanced analytics, insurers will be able to offer policies that are far more closely tailored and much more flexible. This will extend to everything from consumer and health insurance to the underwriting of major extractive industry projects.

IoT in trade finance

In trade finance, data from sensors in ports, ships, and from containers and vehicles gives banks and insurers a new level of end-to-end transparency about the transactions, carriers and cargoes they are asked to fund and underwrite.

This will reduce costly delays and fraud whilst increasing insight into the efficiency of individual operators. All organisations engaged in trade will improve access to working capital. And the use of IoT technology increases the likelihood of small and medium-sized businesses obtaining trade finance and credit, based on rapid analysis of typical industry risk indicators.

Fund management, the markets and IoT

The direct use cases of the IoT are harder to foresee in fund management, investment banking and capital markets and are often confused with analytics and AI. There is, however, no doubt that companies operating in these intensely competitive arenas will have to accommodate themselves to the new volumes of data the IoT will generate from different industrial and commercial sectors. If they fail to build the capacity to analyse aggregated and refined IoT data, they will lose out significantly to financial institutions that have the infrastructure and the solutions in place.

Professional services 

For the professional services sector, access to streaming data and its analytics will enable firms to offer services and outsourcing on a near-real-time basis, eliminating unnecessary hours and increasing efficiency. In accountancy and financial management, the nature of auditing and consultancy is likely to change in industries such as discrete manufacturing, where sensor data will transform how organisations operate. Auditing in many sectors may well become a more continuous process, adapting to the constant flow of data.

The necessary IoT infrastructure – edge computing

IoT growth depends, however, on the expansion of edge infrastructure because it requires a platform with compute, low latency network connectivity and public cloud access. Without this, most use cases will struggle to get off the ground. In the UK, thankfully, the country’s edge infrastructure is advancing fast, bringing IoT technologies and services within reach of almost every business in the country.

Edge computing is vital because the IoT requires gateway hubs to process masses of data from sensors and devices. Because public cloud-based applications that orchestrate the IoT do not require all the data devices generate, IoT gateways are best-suited to edge data centres where they can filter out what is unnecessary and then pass on the critical information.

There are already live use cases in the transport and energy sectors, but large-scale adoption will follow once edge infrastructure platforms have fully developed their low latency connectivity, high-speed backhaul to the public cloud and local computing capabilities.

Applications focused on real-time and aggregated data analytics need connectivity that has either low jitter, loss and lag or has dedicated high bandwidth. Telecommunications companies have been the first movers in this market with 5G, but carrier fibre delivers more dependable waves.

As the IoT develops it will spread across a wide range of business applications that require different kinds of connectivity. This is where Secure Access Service Edge (SASE) networks will deliver major change. SASE gives visibility over applications and enables organisations to securely control traffic intelligently based on continuous assessment of compliance to a policy. Unlike traditional WAN architectures which lack the visibility and control required for distributed IT environments, SASE offers flexibility and the opportunity for ensuring secure access at the time it is needed, which standard MPLS connectivity cannot match. MPLS will have its place but is unlikely to remain a central technology.

Enterprise architectures must accommodate the IoT

There are also remaining challenges to overcome in integrating the multiplicity of IoT devices and workloads into an enterprise’s current architecture. The shortage of staff with the requisite skills is also a barrier for many organisations. This is most easily overcome by collaborating with partners that understand fully the developing relationship between edge platforms and IoT implementations.

For any decision-maker in finance or within a corporate treasury, the evolution of IoT technologies operating on edge infrastructure is a development they must think hard about. Many of their work practices are set to change because of it. And their ability to make effective decisions that propel their organisation to greater efficiency and profitability may depend on how well they adapt to the IoT. They need to consider how their organisation should approach what will be a major advance in capability. With the right infrastructure in place and the right partnerships, all finance professionals stand to gain more control from the Internet of Things, enabling them to transform their organisations.

With a recessionary environment putting the brakes on spending, most large tech businesses are struggling to retain all the employees they brought on board.

We’ve seen companies like Amazon be too short-sighted with their hiring, running into the cyclical trap of overcompensating for the extremes of a boom-and-bust economy. They are now facing the consequences.

Unfortunately, we’ll see more layoffs in 2023 before a recovery kicks in. Many of the organisations facing the prospect of redundancies will inevitably find a way back. How prepared they are for future economic turbulence, however, remains to be seen. What can tech leaders learn from a period of mass layoffs to ensure they don’t make the same mistakes again and can find ways to make themselves more resilient – particularly when it comes to workforce management?

The perennial business mistake

Redundancies will unfortunately always be a fact of business, but too often they are seen as an easy solution to cost cutting, rather than a last resort. It’s easy to forget that laying off staff also means throwing away thousands of pounds’ worth of recruitment costs and puts additional strain on the staff left behind, too. That’s not just in terms of workload, but also stress over their own job security when they see colleagues come and go.

That’s not to say that businesses haven’t looked for other solutions. They still have to remain agile to overcome economic turbulence, and many have put hybrid working initiatives in place to provide additional flexibility. But the demands of a yo-yo economy mean they must extend their agility to how they manage their headcount.

This means moving away from the traditional reliance on permanent, full-time staff, which limits an organisation’s ability to scale up and down quickly in response to market fluctuations and inevitably leads to difficult decisions like making layoffs.

More than numbers

Permanent staff will always have their place in an organisation, but businesses must understand that supplementing them with an on-demand workforce can build in a level of flexibility. Working with freelancers is an established way of doing this, but rarely on the significant scale that Big Tech companies would need to engage them. Engaging on-demand workers means that organisations can scale teams up and down based on demand, without needing to cut ties with valuable employees when the economy dips.

But first, businesses must change how they view flexible talent. Too often it’s been considered foolish to hire temporary employees when someone else could fill the role on a full-time basis and devote their time exclusively to the company. In this way, flexible talent is often viewed as an extra pair of hands.

What many organisations fail to do is look behind the stigma. Working with an on-demand workforce allows businesses to harness a variety of specialist skills whenever they are needed. Business priorities are constantly changing and so they increasingly find they need new skills at the drop of a hat, especially as their digital transformation journeys evolve.

Freelancers can play a vital role in this. With a roster of them on the side, businesses can adapt their workforces by engaging staff with different skill combinations, depending on the requirements of any given project. Doing so is a crucial competitive differentiator in a world where permanent talent continues to pull tighter on the purse strings.

Building back flexible workforces

Research shows that huge swathes of staff, often from the tech industry, are leaving permanent jobs in search of careers that will provide greater independence. In fact, 11.2% of software developers were freelancing in 2021, up from 9.5% in 2020. If Big Tech businesses can take this opportunity to build back their workforces more flexibly, they can not only ascend to their former heights, but stay there through an economic crisis.

Rather than blindly hiring to fuel growth ambitions, supplementing permanent employees with on-demand colleagues can ensure this growth is sustainable. Making flexibility a core tenet of the workforce is of fundamental importance for financial resilience, and as a result, productivity and stability.

Finance Monthly talks all things Moveo Technologies with him below. 

Please tell us more about Moveo Technologies.

Ground has always been a bit of a stepchild of the passenger transportation industry - air, sea, and rail receiving all the plaudits. Our company Moveo Technologies Corporation was envisioned to bring sophisticated logistics to the passenger ground transportation industry. In the process of moving away from the fax machines, spreadsheets, and phone lines, we needed not only to eradicate these, although they were essential, but we also needed to introduce a proactive dispatch system, which was capable of viewing and managing all ground logistics globally. A number of initiatives were undertaken to achieve the lowest incident rate in the industry, chief among them are ISO 9001 certification (a game changer for us in quality management), using machine learning and AI on our in house developed platform, and offering our back-end technology, without charge, to companies serious about passenger transport (e.g., Carnival Cruise Line and a Major League in the US).

What makes the company unique?

It is a combination of the projects we take on and our vision as a company, both of which put our focus on managing serious logistics. The implications of this extend from the individual business traveler to the US Army’s OAW (Operation Allies Welcome), during which we provided logistical support and managed ground transportation for more than 30,000 stateside passengers. General Bradley says it best: “Amateurs talk about strategy. Professionals talk about logistics.”

What are your favourite things about the sector?

I love the fact that the industry has become so receptive to innovation and the appreciation we receive from customers when they get what we do.

What are the challenges you frequently face and how do you resolve them?

The biggest challenge by far is managing growth after COVID. We have grown 20 times larger as a company in the last two years. Even though COVID was a major challenge when business dropped off a cliff, the resolution was realising that we had an opportunity to make fundamental improvements that would position our company to scale. We invested heavily in research and development, focused on machine learning and predictive AI algorithms, to improve our logistical processes. Coupled with a new ISO certified quality management system, we secured the logistics and service for managing, scheduling, and transportation officials to all Major League games when they were not able to fly.

What are your goals for the future of Moveo Technologies?

The two most important ones in the pipeline are a planned expansion to 250 metropolitan service areas by the end of 2025 (we currently serve 100 MSAs domestically and internationally). Furthermore, we plan to offer a high-end air, land, and sea travel as part of an ‘uber’ (pun intended) service line.

 

This decision follows the unconditional clearance by the European Commission of all other EEA countries and referral back to the ADLC for France.

The deal involved overlaps in the wholesale and retail distribution of pharmaceutical goods in several European countries. The ADLC considered both local markets and a national market taking into account the buyer power of the Pharmaceutical Purchasing Groups which mainly operate at national level. CRA played a pivotal role in showing the role of PPGs and the increasing competitive constraints from players evolving outside the defined market, convincing the ADLC to accept the proposed behavioural remedies.

A CRA team including Laurent Flochel, Romain Bizet, and Sylvestre Boittin Duchesne advised both Parties for the European Commission and the ADLC proceedings.

Q&A with Laurent Flochel

Vice President at Charles River Associates

Tell us more about your involvement in the acquisition.

We have assisted both Parties since the beginning of the project. We have worked extensively to gather the relevant data for each Party and carried out all competitive analysis in the prenotification and then during the notification phase. We have also helped the legal teams with the design of potential remedies.

During the prenotification phase, we assisted the Parties to answer to the numerous questionnaires issued by the European Commission, which has been a very heavy task. The Commission cleared the case in Italy and referred back to the French Competition Authority (ADLC) for the analysis of the French market. We then assisted the Parties in this new phase.

What were some of the challenges you were faced with?

In this market, the competitive interactions between the wholesalers and their clients take place at two levels: at a national or multiregional level with the pharma purchasing groups and at a local level with the pharmacies. The Commission and the ADLC carried out their competitive analysis both at the level of the catchment area of each depot and at the multiregional or national level.

How did you resolve them?

We managed to convince the ADLC that the competitive pressure exerted by the purchasing groups is very important and that the competitive analysis should not be limited to the local level (i.e. at the level of the catchment areas). In this market very precise and granular data are available. It allowed us to calculate very accurate market shares in value at different levels.

What have been some of the key trends you’ve seen in the M&A space this year?

The last two years have been very intense in the M&A activity and there is a clear trend for the various competition authorities to a stricter merger control on both sides of the Atlantic. The CMA in the UK is today probably the toughest agency.

They’ve gone up from 3% to 3.5%. This is the ninth time in a row they’ve been hiked.

This increase will result in higher mortgage payments for property owners and people who’ve taken out loans. It comes at a time when everyone across the country is faced with the cost-of-living crisis – right before the Christmas holidays.

Inflation is currently sitting at 10.7% in the country – or over 5 times higher than the 2% target. However, it has slightly eased since November.

Andrew Bailey, Bank of England Governor, said it was the "first glimmer" that soaring price rises were starting to come down but there was still "a long way to go".

On Monday morning, the price of brent crude rose by around 0.6% or over $86 per barrel.

This comes after G7's plans to cap the price of Russian oil at $60 per barrel in an attempt to put additional pressure on Russia over the country's invasion of Ukraine.

Meanwhile, oil producers' group Opex+ said it plans to stick to its policy of reducing output.

Opex+ is an organisation of 23 countries which has regular meetings to decide how much crude oil they can sell to the world market.

Opec+ is a group of 23 oil-exporting countries, including Russia, which meets regularly to decide how much crude oil to sell on the world market.

Analysts said that the group's decision shows support to the oil market.

Polls suggesting the Republicans would convincingly win the Senate and Congress, pushing President Joe Biden into lame-duck irrelevancy, while confirming increasing polarisation and political gridlock across the economy proved wildly wrong. US voters chose to forget the Orange Ghost of President's past, rejecting Donald Trump’s raft of election deniers.

Trump was left looking humiliated but will still stand for the Republican nomination in 2024. The consensus is any sound conventional Republican should beat him.

Had his candidates fared better, and a Trump-led MAGA-dominated party seized both houses, global markets would now be severely concerned about the risks to global trade from increasing US protectionism and isolationism, and the US pulling back from its global hegemon role by withdrawing support for Ukraine, plus the possibility Trump would threaten to pull the US out of NATO in response to Yoorp’s perceived slights on his divine personage. Trump would happily unravel global trade and security for another four years free of the threat of court action.

Fortunately for the global economy – which has been uncertain enough this past year - Biden and the Democrats held the Senate! It means they retain control of many levers of the State – theoretically; they still have to deal with serial troublemakers like Joe Manchin and Kyrsten Sinema who block Democrat legislation even more effectively than the other side. The Republican majority in Congress is razor thin, meaning there are deals to be done to move the US economy forward.

The next couple of months will determine where the US economy is likely to be in November 2024. If inflation continues to ease, the US could be coming out of a thin recession early with growth back online strongly.

The US Midterm Elections are always interesting – but make little sense to outsiders. Why do the Americans have a system which is pretty much designed to ensure any sitting US President will spend an inordinate amount of time domestically politicking, with at least half the House against him at least half his time in office?

It would seem to be a very inefficient form of government from an enabled leadership perspective. Perversely, some of the greatest stock market gains are made following the mid-terms! The data shows stocks gained 17/19 times following midterms. Markets perceive gridlock as a marvellous thing – stopping presidents from spending money or raising taxes to do anything meaningful to the domestic economy.

From the outside, the polarisation of gridlock looks like political madness, but it’s created the compromise politics that drive the US. Political management is simple and very transparent – if a sitting president’s party wants to achieve anything it has to bribe the opposition majority to achieve it.

It sort of works.

However, the headline numbers from the Election hide some fundamental crisis points.

The first is the great age of leadership in both parties. Nancy Pelosi, the retiring Democrat leader of the house of representatives is 82. Mitch McConnell, the leader of the Republicans in the Senate is 80. Biden is 78. They hardly share the same ideals as the young, struggling masses who make up the 84% of Americans under 65. The idea of Biden taking on an equally senile Trump will not fill markets with a sense of here are two men razor fit to command and control the most powerful armed forces the world has ever seen in an increasingly hostile geopolitical landscape.

The question is who replaces them?

Both parties have younger leaders in the wings, but Ron DeSantis, Florida Governor, and the current Republican bright-young-hope sounds much like Trump and focuses on the same support base. Stars of the Progressive Democrat wing, like Alexandria Occasion-Cortez, stand too far left to appeal to the majority of the small number of swing voters required to win an election!

The problem is new leaders from the extremes of each party are unlikely to seize the key middle ground voters – and will simply widen the bitter polarisation seen in US politics, egging on militia and QAnon supporters. Even moderates will be accused of standing for Left-Wing Extreme Wokery or Right-Wing MAGA Libertarianism – pushing away the key voting constituency. After years of Trump, there are few moderates left on the Republican bench – leading to risks of party fracture on left-right fault lines.

Even as the parties struggle to identify their futures, there is the economy to consider. The next couple of months will determine where the US economy is likely to be in November 2024. If inflation continues to ease, the US could be coming out of a thin recession early with growth back online strongly.

Or, we may see the US Federal Reserve contending with strong and more persistent inflation, driven by a long and painful global recession and fundamentals like increasing wage demands (which make transitory inflation spikes into long-term cycles of wage inflation), causing interest rates to remain punishingly high. In such as case the US economy may not be immune to a global slowdown – and the election of 2024 could be an economic gift to the right wing.

In short, the midterms may simply be a problem delayed for the global economy. All the issues about the role of the US in the global economy and markets remain in play.

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