On the heels of a global pandemic that disrupted sourcing processes for 95% of companies, businesses now have a new challenge to tackle: economic uncertainty. Stock market volatility and unstable supply chains amid the war in Ukraine have created a ripple of repercussions across the globe, disrupting the energy market and pushing prices higher in every industry. Recently, the United Nations predicted global inflation to increase to 6.7% this year. In the U.S. alone, inflation reached a 40-year high over the summer and, while consumer sentiment is on the rise, many are opting for discounted items and making less purchases to navigate economic uncertainty.
These price pressures are hitting businesses from both sides. On the one hand, rising inflation is tightening consumer wallets and affecting demand. And on the other, suppliers are increasing their prices and pinching company budgets. In the U.S., the producer price index (which measures business costs) rose by 8.7% from 2021, challenging companies to find creative ways to address increased prices while growing the business.
Many companies rely on two critical teams to help the broader business set budgets and keep costs down as economic uncertainty looms: their financial planning and analysis (FP&A) and their procurement