We may have left the EU on 31st January, but we haven’t left behind any of the confusion and uncertainty. The transition period will close on the 31st of December, but at the moment we’re no closer to a stable trading relationship.
Brexit isn’t ‘done’, and it’s no wonder businesses are worried.
Take the issue of trade, and a number of announcements made over the course of a few days earlier this month. We’ve heard that lengthy border checks post-Brexit will mean additional paperwork and bureaucracy. And uncertainty and complications won’t just be at our ports and at the Tunnel. Additional customs checks, supply chain lead times and logistics costs (as well as changes in levies, quotas and VAT rates) will have to be considered by all businesses, everywhere.
The UK’s economy depends on the free flow of goods and the provision of services. Trade is crucial for the prosperity of UK businesses. As Carolyn Fairbairn, director-general of the CBI commented earlier this month: “As a country, we believe profoundly in the benefits of free trade. It is woven into the fabric of our history.”
During the referendum campaign, the May premiership, and the 2019 general election we heard grand promises of frictionless trade. As things stand that looks unlikely to materialize. But this friction and uncertainty are already imposing significant costs and complexities on businesses up and down the country. This will require careful management during the next phase of talks, and in transitioning to a future trading arrangement – whatever that looks like.
As for that future, technology has been touted as a way to reduce friction and ease the flow of goods. This is, of course, something we know a lot about. But alongside our ERP and EAM solutions, we also advocate comprehensive, outcomes-focused pre-planning, ensuring technology delivers on the unique needs of businesses, and that it delivers long-term value.
The EU referendum took place almost four years ago, but it won’t be until 2025 – almost a decade later – that a new IT system will be deployed at our borders. New technology and new trade deals might be on the way, but in the meantime, uncertainty and a lack of clear direction are having a major impact on UK businesses.
These include those operating in our financial services sector. Michel Barnier warned earlier this month that some UK figures shouldn’t “kid themselves” that the EU will allow “a general open-ended ongoing equivalence in financial services, nor other management or financial agreements.” Instead, said Barnier, the EU “will keep control of these tools, and we will retain the free-hand to take our own decisions.”
Taking back control was just what UK businesses had been promised. But control is a hard thing to grasp when there’s so much uncertainty.
At the beginning of February, I met with several of IFS’s business partners. One told me that their business had seen a significant drop-off in prospects and their ability to close customers has been severely compromised. Why? Because of the level of ongoing uncertainty around future trade deals with the EU. They’re unlikely to be the only ones in this situation.
What’s the solution?
Well, planning for uncertainties can be aided by technology. Using an ERP platform, businesses can gain visibility into all areas of their operations and create a ‘digital twin’: a digital representation of every process, asset or operation. The potential impacts of Brexit can then be applied to these digital models and the results used to make contingency plans and mitigate risk.
Being proactive, gaining complete visibility of operations and assets, running various scenarios and anticipating problems is one means of tackling trade uncertainties. But businesses can only do so much.
As a vendor, IFS not only sells technology solutions, we also actively work with our partners to find broader solutions to the problems facing our customers (and the UK more widely). At a recent event at our office in Staines, we explained how we’re opening up our partner network.
Our huge partner ecosystem brings not only geographical reach but the expertise to deliver for our customers, be that solving complex problems or unlocking new revenue streams. This is particularly beneficial to smaller businesses – and to smaller businesses in the UK that are worried about how trade negotiations will impact their standing in a global market.
Over the course of just a few days this month, the papers were full of trade announcements and disputes. The coming months will see a lot more uncertainty, further negotiations, and renegotiations, and trade deals floated, agreed (and sunk!). We don’t have all the answers, but we’ll continue to work with our global partners to deliver outcomes for our customers, at home and abroad.
Do you have questions or comments?
We’d love to hear them so please leave us a message below.
