Supply chain challenges and cash flow difficulties are forcing CIOs to find innovative digital solutions to maintain the productivity and profitability of their organisation as well as the loyalty of existing customers.
A new report from accounting and advisory firm Kreston Reeves illustrates the extent of the problem. It found that 52% of the UK-based businesses it surveyed are experiencing supply chain delays of up to six months, with a third looking to reduce output and orders as a result. Some 62% of those businesses experiencing supply chain delays expect profitability to fall by up to 10% as a result, and 29% expect profitability to fall by up to 25%.
Analyst firm Gartner forecasts that global IT spending in 2022 will rise 5.5% to over $4.5 trillion as organisations turn to new technologies to help.
Coffee chain Starbucks is one example of a company setting the pace with a digital strategy designed to enhance cash flow while encouraging loyalty to the brand. Starbucks tech investments in the US over the past year have centred on investing in mobile and digital capabilities to build personalized relationships with customers.
One result is that Starbucks has hugely increased advance payments for its products. Using mobile and digital channels to promote adoption of its stored-value card has led to $3 billion of prepayments in the past year. That is up 50% on prepayments in 2019, and has been a key part of helping the organisation’s cash flow during the challenges of the pandemic.
Starbucks is also making additional investments in predictive analytics and automation, as well as the continued transformation of its store portfolio, offering experiences to drive even greater customer loyalty. New pay-as-you-go options are helping Starbucks to reach out to different types of customer, while the use of machine learning algorithms is playing a role in increasing the frequency of customer visits. Finding better ways to analyze customer data means that the retailer can personalize offers to customers even if they don’t belong to its rewards scheme. Automation is helping with supply chain problems thanks to improved inventory management, as well as employee scheduling and equipment diagnostics.