Technology

Optimising help in cutting losses in tough times

bsness

Times are tough, and all sectors are feeling it. Globally, stocks have plunged, wiping billions of dollars from investors, many of whom are fresh in the game following the uptake of retail fractional investment platforms.

The unregulated crypto space that offers alternatives through trading, decentralised finance and other blockchain-powered products has faced the same turbulence. Spectacular busts have happened with the most recent one, the UST stable coin, and LUNA.

On a more relatable front, the cost of energy continues to rise. The latest review by the Energy and Petroleum Regulatory Authority posted a painful jump in retail prices, affecting logistics and mobility, with a straight line to food prices and production costs.

Affected too is the availability and cost of labour – which already saw an upward change with the minimum wage increased by 12 percent effective May 1, 2022. A memo from the Federation of the Public Transport Sector informed a 20 percent rise in fares starting this week.

Companies are actively downsizing. Despite many other sectors looking resilient, it is not possible to mop up all the culled talent. Several venture capital and private equity firms have sent cautionary notes to portfolio companies asking that they ‘mind the runway’ as the funding landscape is not immune and will see a lot more discretion applied.

Optimising for hard times is a challenge every business must review seasonally. Analysed right, and with clarity of mind, it should lead to refactoring of many things that may evade scrutiny in bullish times where false positives on market perception and performance abound.

In markets, opportunities are not equal. While expansion into new territories sounds like a great strategy, it may be wiser to hunker down and focus on regions where fundamentals are healthiest with an easier path to defensible ROI. Do not shy away from rolling back where it makes sense.

In times of plenty or general ease, businesses tend to hire for specialist roles. Staff counts grow, as does the wage bill. The inelasticity of this obligation means that human resourcing conversations need to happen more intently. Lean and mean should be the game plan. Smaller, cross-competent well-compensated teams can deliver better cost-revenue-profit ratios.

In technology, businesses should leverage burstable architecture that allows for cost savings while maintaining uptime, service level agreements, compliance, and other requirements, matching capacity with demand, and actively identifying resource wastage through audits to reduce operating expenditure.

Njihia is the head of business and partnerships at Sure Corporation | www.mbuguanjihia.com | @mbuguanjihia