Unit4 has released findings from a new global study, the Business Future Index. The research sought to understand how businesses around the world approach profit and productivity to sustain their businesses. This has been particularly important during this current economically volatile period.
Included within the study is the Business Maturity Model. The model assesses the maturity of respondent organisations against their overall business state. In addition to their ability to manage financial processes and their people and talent strategies.
Maturity model
The report and Maturity Model offers a stark warning for businesses not getting the priorities right between people, productivity and profit. Analysing performance over the last few years, the Maturity Model identifies organisations as either Optimisers, Embracers, Evaluators, or Hesitators.
Hesitators are the least mature in terms of performance and strategy and show the least business success. Optimisers are the most mature. Some of the major concerns across the groups focused around:
- The great resignation: In the last year, 71% of Hesitators say they have lost staff to competitors compared to only 30% of Optimisers.
- Workplace culture: Only 4% of Hesitators say workplace culture is a top priority for leadership teams in contrast to 87% of Optimisers.
- Digital transformation: 45% of Optimisers are extremely confident in the robustness and comprehensiveness of their digital transformation strategies. This compares to only 1% of Hesitators.
- Technological innovation: 51% of Optimisers have adopted AI and machine learning, compared to only 1% of Hesitators. 56% of Optimisers have adopted real-time reporting tools compared to only 5% of Hesitators.
The Decision-Maker’s delusion
The research reveals a significant disconnect between decision-makers and employees around their response to key issues. The perception among respondents is that their organisation is doing so well. As a result, the view that there is no room for improvement is driven largely by decision-makers. Numbers are almost cut in half across the board when looking at employees who feel their organisation is performing well:
- 25% of decision-makers believe their performance in recruiting and retaining talent has been so good there is no room for improvement. This contrasts with only 12% of non-decision makers.
- 89% of decision-makers believe they have at least met if not exceeded expectations around profitability over the last three years. This compares to 70% of employees.
Financial management in the digital age
Findings from the global study show there are significant concerns about the effectiveness of financial management processes to support organisations. This underlines the importance of using technology to modernise and make businesses more competitive. This area showed major gaps in a business’s ability to be agile, efficient, and accurate in their decision making:
- Over half (56%) find their organisation’s finance processes too slow and cumbersome. This makes everyday tasks like paying suppliers, managing budgets and raising Purchase Order numbers and invoices difficult.
- For ‘Hesitating’ businesses in particular, outdated processes and systems (49%) and human error (43%) are significant issues.
- 62% agree that a lack of access to the right information hampers organisations ability to plan, manage risk and make decisions effectively.
- 55% agree that they are unable to adjust quickly when external factors impact their business.
The time to act is now: The global talent crisis
The research shows that in the last few years, business priorities have focused on survival, namely concentrating on profit and productivity. However, looking ahead, it is clear the biggest concern is attracting and retaining talent. But while people are a business’s most valuable asset, they are often not the biggest focus:
- 90% of organisations admit they face challenges in retaining talent, recruitment and the market fallout resulting from COVID-19. However, the study shows the top three areas of focus are improving operational efficiency, increasing productivity and attracting new customers.
- Talent-related priorities are lower in the rankings with only 17% saying a successful remote or hybrid office environment is important.
- 69% of organisations in the “Hesitating” group say that they don’t do anything to influence workplace culture. Whereas the leadership team intentionally focuses on workplace culture in 95% of “Optimising” businesses.
Thriving in the face of talent shortage
“The Business Maturity Model clearly shows that if organisations are to thrive in the face of talent shortages. They have to set themselves up to be more agile and adaptable. That means being prepared to take risks and embrace innovation,” said Mike Ettling, CEO, Unit4.
“The role technology plays in enabling this organisational and cultural shift will be crucial to determining success. Organisations should be looking to adopt industry-specific technology strategies that are right for their businesses. Our study shows, those getting it right, see positives across talent recruitment and retention, workplace culture and trust in leadership.”
Optimisers show the way
The research has identified a set of characteristics for high performing organisations compared to less successful peers.
- 95% are planning to operate a remote or hybrid working model, in contrast to only 24% of Hesitators.
- They are more prepared to invest to improve financial management processes. 57% were focused on greater investment in technology compared with only 22% of Hesitators.
- 59% of Optimisers are increasing technology investment to improve their ability to forecast, compared to 23% of Hesitators.
Enterprise Times: What this means for business
In the last two years, businesses around the world have put significant focus on just surviving. Profit and productivity became even more important focal points for the business. Enterprises looking to become more competitive and accelerate digital transformation efforts should consider this report.
An easy first step is to identify whether the organisation is a ‘Hesitator’, an ‘Optimiser’ or something in between. Unit4 has developed an impressive benchmark for organisations to assess how well prepared they are for the next five years.
There is much ongoing debate about the long-term societal and workplace impacts
of the last two years. Everything from the ‘Great Migration’ out of urban centres
for better work-life balance to the ‘Great Resignation’ where employees leave en
masse for companies that offer greater flexibility.
Agility will be the key. During the pandemic, some enterprises were able to quickly pivot their businesses to support employees, customers and suppliers. This is perhaps an area missing in the research. Exploring the importance of corporate resilience in sustaining the balanced approach, across profit, productivity and people, that the modern enterprise needs.
