Are You Prepared for Brexit? Really!

Deloitte and SAP Ariba are publishing a series of articles on the Digitalist website around the theme of Brexit and how organisations should be preparing in the procurement and supply chain area.

Firms are being very careful not to be seen as pro or anti-Brexit because it raises such strong feelings in many people, so the content here is resolutely non-political, but nevertheless makes some good points and useful suggestions about the topic.

As we said a while back, it appears that many firms are not particularly on top of their Brexit planning, unsurprisingly given that even the politicians don’t appear to have much of a clue. But assuming it does actually happen, it will have serious implications, so it is worth picking up useful information and ideas where you can, we’d suggest.

The first article from Pascal d’Arc from Ariba and Paul Bray of Deloitte introduces the series and is titled “why Brexit is not like Y2L in driving technological change”. Many of us will remember Y2K and the feverish mood then, with claims that every computer in the world would blow up at midnight and so on. Hype undoubtedly played a big part in the build-up to the year 2000.

But, as d’Arc says, “The technology implications of Brexit will not be about systems stopping working or failing on a given date, rather that those systems may not be able to accommodate the necessary changes to data gathering, tracking, reporting, and compliance that a new UK-EU trade and immigration regime will require without enhancement or integration with new systems”.

So this isn’t some uncertain risk with the potential of disaster, but equally there is no doubt that things will change post-Brexit and there are many areas of uncertainty – it is a much broader issue than Y2K. And while there is risk in Brexit, of course, it alsocreates an environment where we may see technology innovation and adoption accelerate to fill the voids created by Brexit and also to seize such opportunities”.

The second article is titled Tax, Customs and Brexit. No, don’t go! It’s really interesting, honest!  Well, let’s face it, this is not going to make a Netflix box-set, but Paul Harris and Pablo LeCour make a reasonable stab at producing a useful and readable 600 words!

The overall message is again that business needs to take action now. “Failing to prepare and taking a “wait-and-see” approach is risky, and time is quickly running out. There is no certainty yet about the proposed transition period, and the UK may be leaving the EU on 29 March 2019, with trade barriers effective from then. By preparing now, businesses can gain a competitive advantage”.

We don’t know quite what will happen of course but organisations can for instance usefully look at “automating the international trade compliance process”.  And organisations should be looking at the potential for alternative sourcing approaches that might be appropriate post Brexit. “This is because changing UK/EU trade environments may reduce the profitability of businesses that continue to use pre-Brexit supply chains. Businesses could look beyond the EU, or even within the UK, to optimize supply chains”.

The third article is “How to support a plan B for sourcing and contracting post-Brexit”, and this digs into the sourcing issues touched on in the last article.

“Faced with this uncertainty, many sourcing professionals will need to re-examine their category strategies to consider alternative sourcing. Traditional ways of assessing categories will need to be expanded to include the impact of Brexit to identify where procurement strategies may need to be revised to include new suppliers. Early identification of critical parts and suppliers through advanced analytics and new prioritization models will help businesses review their category strategies …”

Digital supplier networks can help to identify new sources of supply, share information, and contribute to better risk management throughout complex supply chains (something else we’ve written about frequently).  Effective source-to-contract technology can also help in supporting rapid change; for instance, by automating the RFX process and constructing effective contracts quickly.

The final paragraph is this, which seems a good place to finish here too. But we’ll be back to look at the further articles in this series; we understand there is more to come.

“Brexit is coming and with foresight, procurement professionals can be prepared. There will be challenges, but many of these can be managed proactively to mitigate continuity of supply risks or potential cost increases. Conversely, there will also be opportunities for savvy procurement teams to reenergize, renew, or reinvigorate their value chains to take cost out, design new products, and create a platform for the future through the intelligent use of technology”.

PS… there is a Brexit Breakfast Briefing: Supply Chains, Sourcing, and Systems
on Thursday 20th September, at 8:30 – 10:00. It is at the Deloitte office, 2 New Street Square, London – EC4A 3BZ

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