In the first six months of 2020, 3,500 companies filed for bankruptcy. Experts expect insolvency numbers to surpass $100 million, rivaling the results of the 2008 economic crisis. There’s nothing to doubt: COVID-19 is deeply impacting companies. In fact, 58% of business leaders say that recent circumstances have completely changed their organization’s strategic priorities.
The search is on for technology that ensures ROI, reduces costs and that can aid companies as they navigate strategic restructuring including organizational changes and project shifts. Many companies, particularly those in asset-heavy or capital-intensive industries, rely on paper invoices and manual workflows that obscure the ability to understand granular costs as they occur. Instead, estimates are used to approximate services performed and/or rendered, resulting in significant payment lags and inaccurate spend views.
Onboarding innovative solutions like blockchain-powered smart contracts can provide companies with comprehensive financial visibility, lending insight to real-time cash flow and management to drive better, more strategic decisions, a must for today’s business climate.
Low-Cost, High Quality Solutions
Despite organizational uncertainties, global spending on digital transformation is expected to increase to $2 trillion in 2022. The pandemic has forced numerous sectors to operate on razor-thin margins, yet 47% of companies have yet to start their digital journeys. Those that remain inactive in this realm continue to fall behind at great costs. Radical transformation and extreme automation — made possible by smart contracts — is changing the nature of business mitigating risk and cutting costs in commercial transactions.
Smart contracts consist of digitized commercial terms that are defined by involved counterparties, eliminating convoluted intermediaries. Performance metrics and data sources are pre-established and once met and verified through field operating data, transactions are automated. Smart contracts provide a secure, immutable record of truth that digitally corroborates real-world physical events and, in doing so, creates an instantaneous and auditable account that enables continuous visibility into financial transactions and thus financial spend and health.
This information is invaluable in managing current spend, saving millions of dollars with less error, risk and in lowering capital requirements to reshape future operations, relegating the days of triplicate paper-based contracts as a thing of the past.
Innovate Now, Not Later
Winston Churchill once said: “Never waste a good crisis.”
There’s no doubt that COVID-19 has triggered innovation. Smart contracts provide a road map to ensure better financial visibility, helping companies capture value, streamline operations and thrive, in current circumstances and beyond.
Those who take the crisis as an opportunity to innovate will possess a foundation to better position themselves for whatever the future brings.
Data Gumbo will host a webinar, “Empowering Real-Time LOE,” on September 23 featuring participants Alan Carnrite, CEO, The Carnrite Group, an energy and industrial sector management consulting firm and Andrew Bruce, CEO, Data Gumbo. Details and registration available here.