The COVID-19 pandemic has pushed the global economy into a recession, which means the economy starts shrinking and growth stops. As the virus swept through the world at an alarming rate, bringing disruption and infecting millions of people, it has also evidently damaged the economy. Several countries across the world resorted to lockdowns to “flatten the curve” of the infection. These lockdowns meant confining millions of citizens to their homes, shutting down businesses and ceasing almost all economic activity. The world is experiencing the largest economic shock in decades. According to the International Monetary Fund (IMF), the global economy is expected to shrink by over 3 per cent in 2020 – the steepest slowdown since the Great Depression of the 1930s. Global Economic Prospects has envisioned a 5.2 percent contraction in global GDP in 2020—the deepest global recession in decades. Over the longer horizon, the deep recessions triggered by the pandemic are expected to leave lasting scars through lower investment.
The question now isn’t how to do more with less, it’s how to make sure you’re around to do anything at all. In these conditions, the first step which the companies follow to ensure their survival is cost cutting. And the next step followed is a sizable impact that recession has on organizations - layoffs and furloughs. It is found that analytically mature organizations are much safer in times of recession. Lotus Analytics helps businesses analyze and focus on their business objectives by tracing viable solutions and their requirements with the necessary set of features, thereby making sure you build the right thing, at the right time, for the right reasons. At Lotus Analytics we help companies evaluate which parts of their solutions or services are most likely to flourish regardless of what the global economic circumstances are. Using business Intelligence, we identify quickly how the recession has affected customers’ buying behavior, and tailor the marketing and products strategies of the business in alignment before significant damage is caused. Furthermore, we assist businesses in the decision-making process in the future and empower companies to expand operational efficiencies and reduce costs.
You don’t need to hunker down to wait out the coronavirus-induced lull. The key to successfully pursuing these opportunities is knowing your core business and strategy inside out; that will guide you in making the right strategic decisions. It never hurts to be prepared. And the data that might help a company survive a recession could help it thrive in the current climate. Below are some ways in which Business Intelligence and Analytics can help your business thrive
• Business Intelligence and Analytics can help companies figure out which aspects of their business are most likely to thrive no matter what the global economic conditions are. It may require a limited focus, but by using the data to pinpoint which products do well in certain markets, a company can direct its energies to the areas it knows will continue to sell. If a company is able to identify through the data customers who enjoy a particular product, that enjoyment is unlikely to lessen even in a recession, and the organization is likely to see an increase in profit from a DTC approach.
• The best business intelligence tools help save time and money. In a recession, finding ways to do business and spend less money becomes paramount. Advanced analytics tools can help organizations figure out what tasks can be automated and point to other economic efficiencies that the company can take advantage of. In many cases, customer retention is key. BI tools can be used to focus on customer engagement, identifying which accounts have been communicated with and whether or not there are accounts that require attention.
• According to Gartner dashboards remain the number one business intelligence (BI) and analytics tool, even for large enterprises. The analytics dashboards available to smaller operations today are more intelligent than ever before and they can be automated to a far greater extent. These are big advantages to smaller and medium businesses. For many it can be a struggle to get on top of their current business situation; everything from cash flow to KPIs, branch sales to specific product sales, or contract management and staying on top of recurring expenses.
• Getting visibility into the type of information they share at a glance, even on a mobile platform like a smartphone, is like comparing travel by steam train to jet aircraft. It used to take the accountants at small to medium businesses hours to days or even weeks to be able to gather all the data, massage it in spreadsheets, then present it to the executives. But, now you don't have to work with spreadsheets or get IT to write reports. Businesses use these dashboards in a variety of ways to make the right decisions to weather the recessionary storm.
• Data helps businesses adopt analytics to best prepare for the reality of the market. There are a small number of recession-proof industries. With industries like healthcare and discount retail often resisting the negative impact of a downturn. For other businesses, they can learn rapidly how the recession has impacted their customers’ purchasing habits, and adjust their marketing and product strategies accordingly before major damage is done.
• Using predictive analytics models also allows companies to cut investment to parts of their business in such a way that, firstly, will actually have an impact that’s beneficial in the short term and, secondly, that will not hamper growth in the long term as the economy climbs out of the downturn.
• Analytics can help you reconsider variable costs during a recession. A quick way of reducing cash outflows is focusing on your variable costs. Many companies have already implemented variable cost-reduction measures such as banning travel and non-essential meetings, freezing hiring, and restricting spend on entertainment and training. Cutting back on variable costs, instead of fixed costs like salaries and insurance, is less financially and operationally harmful to your business.
Every recession is different. Making decisions based on experience of prior recessions is foolish. The change in demographics as baby boomers retire and millennials enter the job market make it impossible for governments to really know what will happen to the job market. Evolving consumer habits as a result in the explosion in technological advancements over the past few years means that this will also be hard to predict, and it could be that companies that barely survived previous recessions do better this time. Analytics can anticipate the direction that it will take and allow for responses to be formulated quickly enough to have an impact. The next recession will likely be even harder to predict, and we ignore data at our peril.
The reality of the current Covid-19 climate means that businesses need to turn to digital solutions to continue serving their customers. In the face of a recession the instinct may be to withdraw and tighten purse strings to stay protected. Yet one of the best ways to prepare for a recession is to continue to invest in technology and service offerings that are right for your business. This will give you a far better chance of coming out ahead of your competitors once the market bounces back. So what does investing in technology look like for your business? It may involve supporting your warehouse team with a better system. It can involve using business analytics to help you truly understand what’s driving your business. When a downturn happens, you’ll be in the best position to provide the best service for your customers.
In a nutshell, investing in technology makes your business more robust and therefore better able to handle uncertainty and rapid changes. Don’t let a recession stop you from improving your business. Companies that use technology and data efficiently to be prepared and proactive will be able to recover from the recession faster — and find themselves in a better position — once the economy picks up. We at Lotus Analytics focus on data-driven justifications to gain data insights. Lotus Analytics provides cost-effective dashboard analytics to gain insights into customer behaviors, which impact products and pricing, optimizing supply chains, and constantly updating revenue forecasts. Lotus Analytics provides much needed innovation tool that ought to be leveraged by organizations and businesses across different activities - from discovering income opportunities, preventing frauds, minimizing wastage, optimizing workforce, and even predicting the next pandemic.